Imperva retreats with downgrade; Kenan revised; Allied, Life Time, Imperial Dade set talk

By Sara Rosenberg

New York, May 1 – In the secondary market on Monday, Imperva Inc. saw its first-lien term loan soften following a downgrade of its issuer credit rating and ratings on its loans by S&P Global Ratings.

Meanwhile, in the primary market, Kenan Advantage Group Inc. increased the size of its incremental first-lien term loan and modified the original issue discount.

Also, Allied Universal, Life Time Inc. and Imperial Dade released price talk with launch, and Blackhawk Network Holdings Inc., Aventiv Technologies LLC and Arcis Golf LLC joined this week’s primary calendar.

Imperva slides

Imperva’s first-lien term loan dropped in trading to 86½ bid, 89½ offered on Monday from 92½ bid, 93½ offered on Friday after the company’s ratings were cut by S&P, according to a trader.

S&P downgraded the company’s issuer credit rating and first-lien credit facility rating to CCC+ from B-, and its second-lien term loan rating to CCC- from CCC. The outlook is stable.

The downgrade actions were taken because of the company’s “continued cash burn and limited liquidity,” the rating release said.

S&P expects Imperva will report another year of negative free cash flow in 2023 because investment spending on sales and marketing and product development combined with higher interest rates pressure profitability and cash generation.

In addition, S&P believes the company’s capital structure has become unsustainable and it will be reliant on significant EBITDA margin expansion or a decline in interest rates to reliably generate positive free cash flow.

Imperva is a San Mateo, Calif.-based provider of cyber security solutions to protect databases and applications.

Kenan tweaked

Moving to the primary market, Kenan Advantage lifted its non-fungible incremental first-lien term loan due 2026 to $300 million from $250 million and changed the original issue discount to 99 from 98.5, according to a market source.

As before, the incremental term loan is priced at SOFR+CSA plus 400 basis points with a 0.75% floor, and has 101 soft call protection for six months. CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

Recommitments were due at 2 p.m. ET on Monday, the source added.

KeyBanc Capital Markets LLC, Barclays, Citizens, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., CIBC, Fifth Third, ING, MUFG and Regions Capital are leading the deal that will be used with cash on hand, the amount of which was reduced with the term loan upsizing, to refinance a $300 million second-lien term loan due 2027.

Kenan Advantage is a North Canton, Ohio-based provider of liquid bulk transportation services to the fuels, chemicals, liquid foods and merchant gas markets.

Allied holds call

Allied Universal emerged in the morning with plans to hold a lender call at 11 a.m. ET on Monday to launch a non-fungible $400 million incremental covenant-lite first-lien term loan B (B2/B) due May 14, 2028 talked at SOFR plus 475 bps with a 0.5% floor, an original issue discount of 97, 101 soft call protection for six months and 0 bps CSA, according to a market source.

Commitments are due at noon ET on Thursday, the source added.

Morgan Stanley Senior Funding Inc. is the left lead on the deal that will be used to refinance existing ABL and revolver borrowings, and to pay fees, expenses and original issue discount associated with the transaction.

The borrowers are Allied Universal Holdco LLC and Atlas LuxCo4 Sarl.

Allied Universal is a Santa Ana, Calif.-based provider of security services.

Life Time refinancing

Life Time announced in the morning that it would hold a lender call at 2 p.m. ET to launch a roughly $274 million covenant-lite term loan B (B2/BB-) due January 2026 talked at SOFR+CSA plus 475 bps with a 25 bps step-down at B2/B corporate ratings, a 0.5% floor, an original issue discount of 99 to 99.5 and 101 soft call protection for six months, a market source said.

CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

Commitments are due at 5 p.m. ET on Thursday, the source added.

Deutsche Bank Securities Inc. is the left lead on the deal that will be used to refinance an existing term loan due December 2024.

Cashless roll is available to lenders.

Life Time is a Chanhassen, Minn.-based operator of athletic resorts offering amenities for fitness and wellness, family recreation and healthy living.

Imperial Dade launches

Imperial Dade held a lender call at 12:30 p.m. ET, launching a $1.5 billion term loan (B3) due December 2028 talked at SOFR plus 475 bps with a 0.5% floor, an original issue discount of 97.5 to 98 and 101 soft call protection for six months, according to a market source.

Commitments are due at 5 p.m. ET on May 9, the source added.

JPMorgan Chase Bank, Barclays, BMO Capital Markets, Credit Suisse Securities (USA) LLC, Citizens, MUFG, Stifel, TD Securities (USA) LLC and US Bank are leading the deal that will be used to extend a portion of the company’s existing first-lien term loans due in June 2026.

Imperial Dade is a Jersey City, N.J.-based distributor of foodservice disposables and janitorial sanitation products.

Blackhawk joins calendar

Blackhawk Network scheduled a lender call for 10:30 a.m. ET on Tuesday to launch a $1.75 billion seven-year term loan B, a market source said.

The term loan has 101 soft call protection for six months, the source added.

BofA Securities Inc. is the left lead on the deal that will be used with cash from the balance sheet to repay the company’s existing first-lien term loan B due 2025 and existing second-lien term loan due 2026.

Blackhawk Network is a Pleasanton, Calif.-based financial technology company and provider of payment solutions, including gift cards, incentive cards and other digital payment solutions.

Aventiv readies deal

Aventiv Technologies will hold a lender call at 10 a.m. ET on Wednesday to launch a $700 million four-year covenant-lite term loan B, a market source remarked.

The term loan has 101 soft call protection for one year.

Commitments are due at noon ET on May 12, the source added.

Deutsche Bank Securities Inc. is the left lead on the deal that will be used with $400 million of other first-lien debt to refinance the company’s existing debt.

Aventiv is a Dallas-based technology platform provider enabling the delivery of mission critical solutions to correctional facilities, government agencies, incarcerated individuals, and their friends & family members during- and post-incarceration.

Arcis Golf on deck

Arcis Golf set a lender call for 10 a.m. ET on Tuesday to launch $200 million of term loans (B+), split between a $160 million incremental covenant-lite term loan B due Nov. 24, 2028 and a $40 million covenant-lite delayed-draw term loan with a final maturity of Nov. 24, 2028, according to a market source.

Price talk on the term loans is SOFR+CSA plus 425 bps with a 0.5% floor. CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate. Original issue discount talk on the term loans is not yet available.

Ticking fees on the delayed-draw term loan are half the spread starting on day 46 and the full spread starting on day 91, the source said.

Commitments are due at noon ET on May 9, the source added.

Deutsche Bank Securities Inc., JPMorgan Chase Bank and Wells Fargo Securities LLC are leading the deal for the Dallas-based owner and operator of private and daily fee golf clubs.

The incremental term loan will be used to fund the acquisition of Pac Life and the delayed-draw term loan will be used to fund the acquisition of Project Pine.

Fund flows

In other news, actively managed loan fund flows on Friday were negative $53 million and loan ETFs were positive $14 million, market sources said.

Outflows for loan funds in 2023 total $12.8 billion, sources added.

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