Innio, Citadel, R1 RCM, A-Gas break; USI revised; Summit Behavioral, Catalent accelerated

By Sara Rosenberg

New York, Dec. 13 – Innio Group finalized the original issue discount on its U.S. and euro term loans at the tight end of revised guidance, and Citadel Securities LP increased the size of its incremental term loan B and adjusted the issue price, and then these deals freed to trade on Wednesday.

Also, R1 RCM Inc. upsized its incremental first-lien term loan B, trimmed the spread, revised the original issue discount and restructured the debt as fungible with the existing term loan B before breaking for trading, and A-Gas FinCo Inc.’s term loan B made its way into the secondary market as well.

In more happenings, USI Inc. modified spread talk on its term loan and changed the issue price, and Summit Behavioral Healthcare LLC and Catalent Pharma Solutions Inc. moved up the commitment deadlines for their incremental term loans.

Innio updated

Innio Group set the original issue discount on its $600 million covenant-lite term loan due November 2028 and on its €1.1 billion covenant-lite term loan due November 2028 at 99.5, the tight end of revised talk of 99 to 99.5 and tighter than initial talk of 98.5, according to a market source.

Pricing on the term loans (B2/B+/B+) is SOFR/Euribor plus 425 basis points with a 0% floor, and both term loans have 101 soft call protection for six months.

Previously in syndication, the sizes of the term loans finalized from initial talk of €1.664 billion equivalent in dollars and euros, with the U.S. tranche having a minimum size of $500 million and the euro tranche having a minimum size of €900, and spreads finalized at the low end of the SOFR/Euribor plus 425 bps to 450 bps talk.

Citigroup Global Markets Inc. is the left lead bookrunner on the U.S. loan, and BNP Paribas, Citigroup, Deutsche Bank Securities Inc. and Unicredit are joint physical bookrunners on the euro loan. BNP Paribas, Citigroup, Deutsche Bank, Morgan Stanley and Unicredit are global coordinators. BofA Securities Inc., Credit Agricole, Erste and Helaba are passive bookrunners. Wilmington Trust is the agent.

Innio starts trading

On Wednesday, Innio’s U.S. term loan broke for trading, with levels quoted at 99 7/8 bid, par 3/8 offered, a trader added.

The euro term loan allocated during the session as well.

The new term loans will be used with balance sheet cash to amend and extend an existing $381 million term loan B due November 2025 and an existing €1.302 billion term loan B due November 2025, to fund the $40 million acquisition of Northeast-Western Energy Systems (NES-WES) from Penn Power Group and to pay a shareholder distribution.

Closing on the acquisition is expected this quarter.

Innio, owned by Advent and Luxinva, is a Jenbach, Austria-based energy solution and service provider in the power generation and compression segments. NES-WES is a power systems integrator in the United States.

Citadel reworked, breaks

Citadel Securities raised its fungible incremental term loan B due July 28, 2030 to $500 million from $400 million and revised the original issue discount to 99.875 from talk in the range of 99.25 to 99.5, a market source remarked.

Pricing on the incremental term loan is SOFR+CSA plus 250 bps with a 0% floor, and the incremental term loan has 101 soft call protection until Jan. 28, 2024, which matches the call protection on the company’s existing roughly $3.54 billion term loan B. CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate, 42.826 bps six-month rate and 71.513 bps 12-month rate.

Commitments were due at 1 p.m. ET on Wednesday, accelerated from 5 p.m. ET on Wednesday, and the term loan freed to trade later in the day, with levels quoted at 99 7/8 bid, par 1/8 offered, another source added.

BofA Securities Inc., Goldman Sachs Bank USA and JPMorgan Chase Bank are leading the deal that will be used with cash from the balance sheet for general corporate purposes, including trading capital.

Citadel is a Miami-based capital markets firm and a provider of market-making services to the fixed income, currency and commodity markets.

R1 RCM modified

R1 RCM lifted its incremental senior secured first-lien term loan B (Ba3/B+/BBB-) due June 2029 to $575 million from $500 million, cut pricing to SOFR plus 300 bps from talk in the range of SOFR plus 325 bps to 350 bps and tightened the original issue discount to 98.79 from 98.5, according to a market source.

Also, the incremental term loan was changed to fungible with the company’s existing $495 million term loan B due June 2029 from non-fungible originally, the source said.

As before, the incremental term loan has a 0% floor, 101 soft call protection for six months, and a ticking fee of half the margin from days 46 to 90 and the full margin thereafter. The call protection will now apply to the existing term loan as well.

JPMorgan Chase Bank, BofA Securities Inc. and Barclays provided the debt commitment. BofA Securities is the administrative agent.

R1 RCM frees up

Recommitments for R1 RCM’s incremental term loan were due at 2:30 p.m. ET on Wednesday, and the debt broke later in the day, with levels quoted at 99½ bid, par offered, another source added.

The term loan will be used with revolver borrowings, the amount of which was reduced with the term loan upsizing, and cash on hand to fund the acquisition of Acclara from Providence for $675 million in cash and warrants to purchase 12.2 million shares of R1 RCM stock.

Closing is expected in early 2024, subject to customary conditions, including regulatory approvals, as well as the entry of Providence and Acclara into a 10-year revenue cycle management agreement.

Pro forma credit agreement net leverage is expected to be around 3.2x at close.

R1 RCM is a Murray, Utah-based provider of technology-driven solutions that transform the patient experience and financial performance of health care providers. Acclara is a provider of revenue cycle management solutions to the health care industry.

A-Gas hits secondary

A-Gas’ $520 million six-year senior secured covenant-lite term loan B (B2/B) began trading as well, with levels quoted at 88 bid, a market source said.

Pricing on the term loan is SOFR plus 525 bps with a 25 bps step-down upon an initial public offering and a 0.5% floor. The debt was sold at an original issue discount of 87 and has 101 soft call protection for one year.

During syndication, pricing on the term loan widened from SOFR plus 500 bps, 25 bps step-downs at 0.5x and 1x inside opening senior secured net leverage were removed, the floor was increased from 0%, the discount was changed from revised talk in the range of 85 to 86 and initial talk in the range of 96 to 97, the call protection was extended from six months, the maturity was shortened from seven years, changes were made to documentation, including to debt, fixed incremental, MFN and EBITDA, and lender calls became required every quarter in connection with delivery of quarterly and annual financials.

A-Gas being acquired

The term loan will be used to help fund the acquisition of a majority stake in A-Gas by TPG from KKR. KKR will remain a significant minority shareholder in the business.

Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Guggenheim and Truist Securities are leading the term loan. Truist is the administrative agent.

Closing is expected on Thursday.

A-Gas is a U.K.-based supplier and lifecycle manager of refrigerant and industrial gases, fire suppressants and blowing agents.

USI revised

USI changed price talk on its $2.475 billion term loan due November 2029 to a range of SOFR plus 300 bps to 325 bps from just SOFR plus 325 bps, and adjusted the issue price to par from talk in the 99.875 area, according to a market source.

The term loan still has a 0% floor and 101 soft call protection for six months.

Recommitments were due at 5 p.m. ET on Wednesday and allocations are expected on Thursday, the source added.

BofA Securities Inc. and KKR Capital Markets are leading the deal that will be used to reprice an existing term loan down from SOFR plus 375 bps with a 0.5% floor.

USI is a Valhalla, N.Y.-based insurance brokerage and consulting firm.

Summit tweaks timing

Summit Behavioral accelerated the commitment deadline for its fungible $200 million incremental first-lien term loan due Nov. 24, 2028 to noon ET on Thursday from noon ET on Friday, a market source remarked.

Pricing on the incremental term loan is SOFR+CSA plus 475 bps with a 0.75% floor, and the debt is talked with an original issue discount of 98.5 to 99. CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

Jefferies LLC is the left lead on the deal that will be used to refinance the company’s existing second-lien term loan.

Pro forma for the transaction, the first-lien term loan will total $799,865,000.

Summit Behavioral is a Franklin, Tenn.-based behavioral health services provider with a focus on the substance use disorder and acute psychiatric treatment end markets.

Catalent accelerated

Catalent Pharma Solutions moved up the commitment deadline for its $500 million incremental term loan B-4 (Ba2/BB-) due 2028 to 5 p.m. ET on Wednesday from 5 p.m. ET on Thursday, according to a market source.

Talk on the term loan is SOFR plus 300 bps to 325 bps with a 0.5% floor, an original issue discount of 98.5 and 101 soft call protection for six months.

JPMorgan Chase Bank is leading the deal that will be used to repay revolver borrowings.

Catalent is a Somerset, N.J.-based provider of development sciences and manufacturing platforms for medicines.

Fund flows

In other news, actively managed loan fund flows on Tuesday were negative $33 million and loan ETFs were positive $28 million, sources said.

Actively managed high-yield fund flows on Tuesday were negative $25 million and high-yield ETFs were positive $424 million, sources added.

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