Cetera Financial, Ceva Sante, SUSE float term debt pricing guidance with launch

By Sara Rosenberg

New York, Oct. 17 – In the primary market on Tuesday, Cetera Financial Group (Aretec Group Inc.) disclosed original issue discount guidance on its incremental first-lien term loan for the acquisition of Avantax Inc. and a refinancing of an existing term loan.

Also, Ceva Sante released price talk on its term loan B, which will be used to repay some existing debt, and SUSE price guidance emerged in connection with its lender call.

Cetera sets talk

Cetera Financial Group held its lender call on Tuesday morning and announced original issue discount talk of 97 to 97.5 on its fungible $1.689 billion incremental first-lien term loan due August 2030, according to a market source.

Like the existing term loan, the incremental term loan is priced at SOFR+CSA plus 450 basis points with a 0% floor, and all of the debt is getting 101 soft call protection for six months. CSA is 10 bps one-month rate, 15 bps three-month rate and 25 bps six-month rate.

Pro forma for the transaction, the first-lien term loan will total around $2.439 billion.

Along with the incremental term loan, the company is getting a $300 million five-year revolver.

Commitments are due at noon ET on Oct. 26.

Cetera lead banks

UBS Securities LLC, Goldman Sachs Bank USA, BMO Capital Markets Corp., Deutsche Bank Securities Inc., Truist Securities Inc., Jefferies LLC, Morgan Stanley Senior Funding Inc., Barclays and Antares Capital are leading Cetera’s financing.

The bank debt will be used with $700 million of other secured debt to fund the acquisition of Avantax Inc. for $26.00 in cash per share in a transaction valued at about $1.2 billion, inclusive of Avantax’s net debt, and to refinance the company’s existing first-lien term loan due 2025.

With the acquisition, Genstar and co-investors will be reinvesting in Cetera with new and rollover equity.

Closing is expected by the end of this year, subject to stockholder approval, regulatory approvals and other customary conditions.

Cetera is a San Diego-based investment advisor network. Avantax is a Dallas-based provider of tax-focused financial planning and wealth management.

Ceva Sante guidance

Ceva Sante came out with talk on its €500 million equivalent U.S. senior secured term loan B due November 2030 and €1.8 billion senior secured term loan B due November 2030 in connection with its morning lender call, a market source remarked.

The U.S. term loan is talked at SOFR plus 425 bps with a 0% floor and an original issue discount of 99, and the euro term loan is talked at Euribor plus 425 bps with a 0% floor and a discount of 99 to 99.5, the source continued. Both loans (B2/B) have 101 soft call protection for six months.

Commitments are due at 5 p.m. ET on Oct. 25 for the U.S. loan and at noon ET on Oct. 25 for the euro loan.

JPMorgan Chase Bank is the sole physical bookrunner on the U.S. term loan. Barclays and JPMorgan are the joint physical bookrunners on the euro term loan. Credit Agricole, Natixis and Nomura are joint bookrunners. JPMorgan is the agent on the U.S. loan and Natixis is the agent on the euro loan. Credit Agricole is the ESG agent.

The term loans will be used by the France-based animal health company to refinance an existing term loan B and capital expenditures facility, to partially repay a PIK facility, and to pay related fees and expenses.

SUSE launches

SUSE launched on its morning lender call its $1.255 billion equivalent U.S. and euro seven-year covenant-lite term loan B (B2/B+) with talk of SOFR/Euribor plus 450 bps with a 25 bps step-down at 3.9x first-lien net leverage and an original issue discount of 98 to 98.5, according to a market source.

The U.S. term loan has a 0.5% floor and the euro term loan has a 0% floor, the source said.

Both term loans have 101 soft call protection for six months.

Sizes of the U.S. and euro tranches are still to be determined.

Commitments are due at 10 a.m. ET on Oct. 26.

Goldman Sachs, BofA Securities Inc., Deutsche Bank and JPMorgan are the physical bookrunners on the deal. HSBC and Jefferies are joint bookrunners. JPMorgan is the administrative agent.

The term loans will be used to fund the tender offer for the company’s shares by EQT, to repay existing debt under the OpCo SFA and 2020 sidecar facilities agreement, and to amend and extend existing debt facilities.

SUSE is a Nuremberg, Germany-based provider of open source infrastructure software for large enterprises.

Fund flows

In other news, actively managed loan fund flows on Monday were negative $46 million and loan ETFs were positive $31 million, sources said.

Outflows for loan funds week-to-date total an estimated $18 million, compared to outflows in the prior week of $100 million, sources added.

Loan indices rise

IHS Markit’s iBoxx loan indices were stronger on Monday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.08% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.13%.

Month to date, the MiLLi is up 0.18% and year to date it is up 10.03%, and the LLLi is up 0.26% month to date and up 9.35% year to date.

Average secondary market bids in the U.S. on Monday were 93.04, up 0.02% from the previous day and up 1.27% year to date.

According to the IHS Markit data, some of the top advancers on Monday were Radiology Partners’ July 2018 covenant-lite term loan at 75, up from 72.39, Zayo’s March 2020 U.S. covenant-lite term loan at 85.91, up from 84.65, and Essential Power’s (Nautilus Power) April 2023 term loan B at 78.6, up from 77.57.

Some top decliners on Monday were Research Now/Survey Sampling’s December 2017 second-lien covenant-lite term loan B at 40.83, down from 43.71, Air Methods’ April 2017 covenant-lite term loan B at 26.83, down from 28.56, and EyeCare Partners’ August 2022 incremental term loan at 65.5, down from 66.67.

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