Kettle Cuisine upsized first-lien term loan breaks; Bay Club term loans begin trading

By Sara Rosenberg

New York, Aug. 22 – Kettle Cuisine increased the size of its first-lien term loan before freeing up for trading on Wednesday, and Bay Club (Bulldog Purchaser Inc.) saw its first-and second-lien term loans surface in the secondary market above their original issue discounts.

Kettle Cuisine tweaked

Kettle Cuisine raised its seven-year covenant-light first-lien term loan to $266 million from $240 million, and left pricing at Libor plus 375 basis points with a 1% Libor floor and an original issue discount of 99.5, according to a market source.

The first-lien term loan still has 101 soft call protection for six months.

Previously in syndication, the spread on the first-lien term loan was trimmed from talk in the range of Libor plus 400 bps to 425 bps.

The company’s now $385 million of credit facilities also include a $50 million five-year revolver and a $69 million pre-placed second-lien term loan that was scaled back from $71.5 million, the source said.

BNP Paribas Securities Corp. is leading the deal.

Kettle Cuisine frees up

After final terms were in place, Kettle Cuisine’s credit facilities began trading, and the first-lien term loan was quoted at par bid, a trader added.

Proceeds from the new debt will be used to fund the merger of Kettle Cuisine with Bonewerks Culinarte, both of which are owned by Kainos Capital, and, due to the upsizing, to finance a tuck-in acquisition.

Kettle Cuisine is a Lynn, Mass.-based manufacturer of soups prepared in refrigerated and frozen formats. Bonewerks Culinarte is a Green Bay, Wis.-based producer of demi-glace, sauces and sous-vide entrees.

Bay Club hits secondary

Bay Club’s credit facilities freed up too, with the $340 million seven-year covenant-light first-lien term loan (B2/B+) quoted at 99¼ bid, 99¾ offered, the $185 million delayed-draw covenant-light first-lien term loan (B2/B+) quoted at 99 1/8 bid, 99 5/8 offered, and both the $125 million eight-year covenant-light second-lien term loan (Caa2/CCC+) and $65 million delayed-draw covenant-light second-lien term loan (Caa2/CCC+) quoted at par bid, 101 offered, a trader remarked.

Pricing on the first-lien term loan debt is Libor plus 375 bps with a 0% Libor floor and it was sold at an original issue discount of 99. The loan has 101 soft call protection for one year.

The second-lien term loan debt is priced at Libor plus 775 bps with a 0% Libor floor and it was issued at a discount of 99. This debt has hard call protection of 102 in year one and 101 in year two.

Delayed-draw ticking fees are half the margin from days 31 to 60 and the full margin thereafter.

The company’s $765 million of senior secured credit facilities include a $50 million five-year revolver (B2/B+).

Bay Club lead banks

Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch, Jefferies LLC and KKR Capital Markets LLC are leading Bay Club’s credit facilities.

On Tuesday, the discount on the first-lien term loan debt widened from 99.5 and the call protection was extended from six months, the discount on the second-lien term loan debt firmed at the tight end of the 98.5 to 99 talk, the delayed-draw ticking fees were changed from half the margin from days 61 to 120 and the full margin thereafter, and the carve-out for real estate sale and lease back specified disposition was revised to $125 million from $250 million and ratios were tightened to 0.5 times inside closing leverage levels.

Proceeds will be used to fund the buyout of the company by KKR from York Capital Management and minority investors.

Closing is expected on Aug. 31.

Bay Club is a San Francisco-based active lifestyle and hospitality company.

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