Smart Foodservice breaks; Victory Capital, Blackstone CQP, United Planet changes surface

By Sara Rosenberg

New York, June 6 – Smart Foodservice (Sage Borrowco LLC) increased the size of its term loan B, firmed the spread at the low end of guidance and made a number of documentation changes, and then the debt freed up for trading on Thursday.

In more happenings, Victory Capital Holdings Inc. reduced the size of its term loan B and lowered pricing, and Blackstone CQP Holdco LP upsized its term loan B and modified the original issue discount.

Also, United Planet Fitness Partners (United PF Holdings LLC) shifted some funds between its funded and delayed-draw first-lien term loans and updated pricing and call premiums on its first- and second-lien debt, and Imperial Dade (BCPE Empire Holdings Inc.) moved up the commitment deadline for its first-lien term loan.

Furthermore, Vast Broadband announced price talk with launch, and Justrite Safety Group, Vitech Systems Group and RCN (Radiate Holdco LLC) emerged with new deal plans.

Smart Foodservice revised

Smart Foodservice raised its seven-year covenant-lite term loan B to $425 million from $405 million and finalized pricing at Libor plus 475 basis points, the low end of the Libor plus 475 bps to 500 bps talk, while leaving the 0% Libor floor, original issue discount of 99 and 101 soft call protection for six months intact, a market source said.

Regarding documentation, the MFN was changed to 50 bps for life from 75 bps for six months, and MFN carve-outs were removed for inside maturity basket, MFN exception amount basket, syndicated floating-rate term loans, term loans that are incurred to finance an acquisition/investment, term loans that mature at least two years after the maturity date of the existing term loan and facilities initially established under the dollar or debt prepayment prongs, the source continued.

Also, mandatory prepayments were changed to remove the asset sale step-downs, unlimited restricted payments were modified to be subject to pro forma net leverage of 1x inside closing date leverage from 0.75x inside closing date leverage, and a quarterly lender call requirement was added.

Additionally, the criteria for unlimited investments, investments in similar businesses and investments in joint ventures were revised.

Smart Foodservice frees up

Recommitments for Smart Foodservice’s term loan were due at 1 p.m. ET on Thursday and, late in the afternoon, the debt emerged in the secondary market with levels quoted at 99½ bid, par offered before moving up to 99¾ bid, 100¼ offered, a trader added.

The company’s now $475 million of senior secured credit facilities also include a $50 million revolver.

Deutsche Bank Securities Inc., BMO Capital Markets Corp., RBC Capital Markets, Bank of America Merrill Lynch, Barclays, Credit Suisse Securities (USA) LLC and UBS Investment Bank are leading the deal that will be used to help fund the buyout of Smart & Final Stores Inc. by Apollo Global Management LLC.

Closing is expected in mid-June.

Smart Foodservice is a Portland, Ore.-based retailer of bulk foodservice offerings almost exclusively catering to small restaurant businesses and commercial customers.

Victory tweaks loan

Back in the primary market, Victory Capital scaled back its seven-year term loan B to $1.1 billion from $1.13 billion and cut pricing to Libor plus 325 bps from Libor plus 350 bps, according to a market source.

Also, the MFN sunset and two-year maturity carve-out were removed, and the unlimited restricted payments threshold was revised to 0.5x from 0.25x inside of opening first-lien net leverage, the source said.

As before, the term loan has a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

The company’s now $1.2 billion of senior secured credit facilities also include a $100 million five-year revolver.

Commitments are due at noon ET on Friday.

Victory buying USAA

Victory Capital will use its new credit facilities to fund the acquisition of USAA Asset Management Co. for $850 million plus the opportunity for additional contingent payments based on future business performance.

The downsizing to term loan B was done because the company generated excess free cash flow on the back of strong performance and requires less debt to consummate the acquisition, the source added.

Barclays, RBC Capital Markets and BMO Capital Markets are leading the debt.

Closing is expected on July 1, subject to regulatory approval and other customary conditions.

Victory Capital is a Brooklyn, Ohio-based asset management firm. USAA Asset Management is a San Antonio-based investment firm.

Blackstone CQP modified

Blackstone CQP Holdco lifted its five-year senior secured term loan B to $2.6 billion from $2.5 billion and changed the original issue discount to 99.75 from talk in the range of 99 to 99.5, a market source remarked.

The term loan is still priced at Libor plus 350 bps with a 0% Libor floor and has 101 soft call protection for six months.

Commitments are due at noon ET on Friday, with allocations expected thereafter, the source added.

Morgan Stanley Senior Funding Inc. is the left lead on the deal that will be used to refinance existing senior secured notes, fund a distribution to Blackstone and pay transaction fees and expenses.

Blackstone CQP owns about a 40% interest in Cheniere Energy Partners LP. CQP owns Sabine Pass Liquefaction LLC, which owns and operates five fully operational and fully contracted LNG trains, with a fully permitted, planned sixth train in late-stage development.

United Planet reworked

United Planet Fitness Partners increased its funded seven-year first-lien term loan (B1/B) to $475 million from $465 million, decreased its delayed-draw seven-year first-lien term loan (B1/B) to $65 million from $75 million, firmed pricing on the debt at Libor plus 450 bps, the high end of the Libor plus 425 bps to 450 bps talk, and extended the 101 soft call protection to one year from six months, according to a market source.

In addition, pricing on the $110 million eight-year second-lien term loan (Caa1/CCC+) was set at Libor plus 850 bps, the high end of the Libor plus 825 bps to 850 bps guidance, and the call protection was revised to 103 in year one, 102 in year two and 101 in year three from 102 in year one and 101 in year two, the source said.

And, some documentation changes were made to the credit agreement.

All of the term loans still have a 0% Libor floor, the first-lien term loan debt still has an original issue discount of 99, and the second-lien term loan still has a discount of 98.5.

The company’s $670 million of credit facilities also include a $20 million five-year revolver (B1/B).

Commitments are due at 2 p.m. ET on Friday, the source added.

Jefferies LLC and Fifth Third are leading the deal that will be used to refinance existing debt and fund club acquisitions.

United Planet Fitness Partners is an Austin, Tex.-based operator of Planet Fitness Clubs.

Imperial adjusts timing

Imperial Dade accelerated the commitment deadline for its $790 million seven-year covenant-lite first-lien term loan (B3/B) to 5 p.m. ET on Monday from 5 p.m. ET on Wednesday, according to a market source.

Talk on the first-lien term loan is Libor plus 400 bps to 425 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

Of the total first-lien term loan amount, $130 million is delayed-draw.

The company’s $1,265,000,000 of credit facilities also include a $175 million ABL revolver, a privately placed $250 million second-lien term loan (Caa2/CCC+) and a privately placed $50 million delayed-draw second-lien term loan (Caa2/CCC+).

Credit Suisse Securities (USA), Barclays and Citizens Bank are leading the deal that will be used to help fund the buyout of the company by Bain Capital. Audax Private Equity, the company’s investment partner since 2016, will retain a stake in the company.

Closing is expected this quarter, subject to customary conditions and regulatory approvals.

Imperial Dade is a distributor of disposable food service and janitorial supplies with headquarters in Jersey City, N.J., and Miami.

Vast Broadband guidance

Also in the primary market, Vast Broadband held its bank meeting on Thursday and released talk on its $237.5 million seven-year first-lien term loan B (B) at Libor plus 425 bps to 450 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source said.

Commitments are due on June 20, the source added.

The company’s $387.5 million of credit facilities also include a $75 million five-year revolver (B) and a $75 million privately placed second-lien term loan.

SunTrust Robinson Humphrey Inc., TD Securities (USA), CoBank and Webster Bank are leading the deal that will be used to help fund the acquisition of NTS Communications from Tower Three Partners and recapitalization of Vast by Oak Hill Capital Partners and Pamlico Capital.

Vast Broadband is a provider of broadband, video and voice services. NTS is a broadband fiber company.

Justrite readies deal

Justrite Safety Group set a bank meeting for 1:30 p.m. ET on Tuesday to launch $495 million of first-lien credit facilities, according to a market source.

The facilities consist of a $35 million revolver, a $410 million seven-year first-lien term loan B and a $50 million delayed-draw first-lien term loan B with two year availability. The funded and delayed-draw term loans are being sold as a strip.

Talk on the term loan B debt is Libor plus 425 bps to 450 bps with a 0% Libor floor and an original issue discount of 99, the source said. The term loan B has 101 soft call protection for six months.

The company is also getting a $127.5 million privately placed second-lien term loan.

Citizens Bank and Golub are leading the deal that will be used to refinance existing debt.

Justrite, an Audax Group portfolio company, is a Des Plaines, Ill.-based manufacturer and supplier of non-personal protective equipment solutions for industrial and compliance-oriented end markets.

Vitech on deck

Vitech Systems Group scheduled a lender call for 1 p.m. ET on Wednesday to launch $125 million of credit facilities, a market source remarked.

The facilities consist of a $25 million revolver and a $100 million seven-year term loan B, the source added.

RBC Capital Markets is leading the deal that will be used to help fund the buyout of the company by CVC Capital Partners.

Closing is expected later this summer.

Vitech is a New York-based provider of cloud-based financial administration solutions.

RCN joins calendar

RCN will hold a lender call at 1:30 p.m. ET on Monday to launch a non-fungible $300 million incremental first-lien term loan due February 2024, according to a market source.

Guggenheim Securities, Bank of America Merrill Lynch, Barclays, Goldman Sachs Bank USA, J.P. Morgan Securities LLC, Morgan Stanley Senior Funding, Nomura and SocGen are leading the deal that will be used to fund a shareholder distribution.

RCN is a cable operator.

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