U.S. Renal Care frees to trade; WaterBridge, Spencer Spirit loan updates surface

By Sara Rosenberg

New York, June 14 – U.S. Renal Care Inc. firmed the original issue discount on its term loan B at the wide end of revised guidance, and then the debt made its way into the secondary market on Friday, with levels quoted above the issue price.

In other news, WaterBridge Operating LLC widened the spread, Libor floor and original issue discount on its term loan B and made a number of modifications to documentation.

Also, Spencer Spirit IH LLC modified the issue price on its term loan B, and ERM joined the near-term new issue calendar.

U.S. Renal updated

U.S. Renal Care set the original issue discount on its $1.6 billion first-lien term loan B at 98, the wide end of revised talk of 98 to 98.5 and wide of initial talk of 99, according to a market source.

Pricing on the term loan is Libor plus 500 basis points with a 0% Libor floor, and the debt has 101 soft call protection for one year.

On Thursday, the term loan was downsized from $1.62 billion, the spread was lifted from talk in the range of Libor plus 450 bps to 475 bps, the call protection was extended from six months, and a number of documentation changes were made, including to consolidated EBITDA, MFN, incremental debt, inside maturity basket, asset sale step-downs, available amount, restricted payments, investments, indebtedness and liens.

The company’s $1.75 billion of credit facilities also include a $150 million revolver.

Barclays, Bank of America Merrill Lynch, BMO Capital Markets, Macquarie Capital (USA) Inc., RBC Capital Markets and SunTrust Robinson Humphrey Inc. are leading the deal.

U.S. Renal breaks

After terms finalized, U.S. Renal’s term loan B began trading on Friday, with levels quoted at 98 1/8 bid, 98½ offered, another source remarked.

The new credit facilities will be used with $505 million of unsecured notes to help fund the buyout of the company by Chris Brengard and management, along with Bain Capital Private Equity, Summit Partners, Revelstoke Capital Partners and Mark Caputo.

Closing is subject to customary closing conditions, including regulatory approvals.

U.S. Renal is a Plano, Texas-based provider of dialysis services.

WaterBridge reworked

WaterBridge lifted pricing on its $1 billion seven-year term loan B (B1/B/BB) to Libor plus 575 bps from Libor plus 550 bps, changed the Libor floor to 1% from 0% and moved the original issue discount to 97.5 from talk in the range of 98.5 to 99, according to a market source.

Also, a number of documentation changes were made, including to MFN, incremental, excess cash flow sweep, restricted payments, junior debt payments, permitted investments, designation of unrestricted subsidiaries, transactions with affiliates, EBITDA definition, and mandatory lender calls, the source said.

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

The company’s $1.15 billion of credit facilities also include a $150 million five-year revolver (BB-).

Commitments are due at 1 p.m. ET on Monday, the source added.

WaterBridge lead banks

Barclays, Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, ING, RBC Capital Markets, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC are leading WaterBridge’s credit facilities.

The new debt will be used to repay an existing revolver and term loan A, to fund the acquisition of water infrastructure assets from PDC Energy for $125 million and to prefund capital expenditures.

Closing is expected mid-year.

Five Point Energy is the sponsor.

WaterBridge is a Houston-based midstream company that owns and operates extensive permanent water infrastructure systems strategically located in the Delaware and Arkoma basins.

Spencer Spirit revised

Spencer Spirit adjusted the original issue discount on its $385 million seven-year covenant-lite term loan B (B2/B) to 98 from 99, a market source said.

The term loan is priced at Libor plus 600 bps with a 0% Libor floor and has 101 soft call protection for one year.

Earlier in syndication, pricing on the term loan finalized at the wide end of the Libor plus 575 bps to 600 bps talk, the call protection was extended from six months, amortization was increased to 5% in 2020 and 3% per annum thereafter from 1% per annum and the MFN sunset was eliminated.

Guggenheim and Wells Fargo Securities LLC are leading the deal that will be used to refinance existing debt.

Spencer is an Egg Harbor Township, N.J.-based specialty retailer focused on lifestyle accessories and specialized Halloween merchandise.

ERM readies deal

ERM set a bank meeting for 10:30 a.m. ET in New York on Monday and a bank meeting in London on Tuesday to launch $700 million equivalent of first-lien term loans, a market source remarked.

The debt consists of a $500 million seven-year covenant-lite first-lien term loan B and a $200 million equivalent euro seven-year covenant-lite first-lien term loan B, the source added.

Commitments are due at 5 p.m. ET on June 26.

The company is also getting a $175 million eight-year pre-placed covenant-lite second-lien term loan.

Citigroup Global Markets Inc. is the sole global coordinator and physical bookrunner on the deal that will be used to refinance existing credit facilities. HSBC, ING, J.P. Morgan Securities LLC and RBC Capital Markets are joint bookrunners.

ERM is a provider of environmental, health, safety, and risk consulting and sustainability related services.

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