Franklin Energy, Shields Health Solutions, US Ecology free up; US Foods revises timing

By Sara Rosenberg

New York, Aug. 14 – Franklin Energy Group firmed the spread on its first-lien term loan at the low end of guidance and Shields Health Solutions Holdings LLC set pricing on its first-lien term loan at the high side of talk, and then both of these deals freed up for trading on Wednesday.

Also, US Ecology Inc.’s term loan B made its way into the secondary market during the session and was trading well above its original issue discount.

And, in more happenings, US Foods Holding Corp. moved up the commitment deadline for its term loan B.

Franklin updated, trades

Franklin Energy Group set pricing on its $325 million seven-year covenant-lite first-lien term loan (B1/B) at Libor plus 400 basis points, the low end of the Libor plus 400 bps to 425 bps talk, and left the 0% Libor floor, original issue discount of 99.5 and 101 soft call protection for six months unchanged, according to a market source.

The company’s $480 million of credit facilities also include a $35 million five-year revolver (B1/B) and a $120 million eight-year second-lien term loan (Caa1/CCC+) that was privately placed.

On Wednesday, the first-lien term loan broke for trading and levels were seen at 99¾ bid, par ¼ offered, a trader added.

Antares Capital is the lead on the deal.

Proceeds will be used to help fund the buyout of the company by ABRY Partners.

Franklin Energy is a Port Washington, Wis.-based vertically-integrated demand-side management company offering outsourced program administration services, product fulfillment and customer engagement software.

Shields firms, breaks

Shields Health Solutions finalized the spread on its $200 million seven-year covenant-lite first-lien term loan at Libor plus 500 bps, the wide end of the Libor plus 475 bps to 500 bps talk, a market source said.

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

The company’s $215 million of credit facilities (B3/B-) also include a $15 million revolver.

After pricing firmed up, the term loan emerged in the secondary market and was quoted at 99½ bid, par ½ offered, the source added.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to help fund the buyout of the company by Welsh, Carson, Anderson & Stowe and, as part of this transaction, Walgreen Co., a drugstore chain, is also making an equity investment in Shields Health.

Closing is expected in the third quarter, subject to customary regulatory reviews.

Shields Health is a Stoughton, Mass.-based specialty pharmacy integrator and care provider, partnering with hospitals on specialty pharmacy creation, growth and management.

US Ecology frees up

US Ecology’s $450 million seven-year covenant-lite term loan B (Ba3/BB+) began trading as well, with levels quoted at par bid, par ½ offered on the break, then it traded as high as par ½ bid, 101 offered before settling in at par ¼ bid, par 5/8 offered, according to a market source.

Pricing on the term loan is Libor plus 250 bps with a step-down to Libor plus 225 bps if corporate family ratings are Ba2 and BB with stable outlooks and a 0% Libor floor. The debt was sold at an original issue discount of 99.75 and has 101 soft call protection for six months.

During syndication, the term loan was upsized from $400 million, pricing was lowered from Libor plus 275 bps, the step-down was added and the discount was tightened from 99.5.

Wells Fargo Securities LLC and BofA Securities Inc. are leading the deal that will be used to refinance NRC Group Holdings Corp.’s existing debt, to pay transaction related fees in connection with US Ecology’s all-stock acquisition of NRC Group and, because of the recent upsizing, to repay revolver borrowings.

US Ecology is a Boise, Idaho-based provider of environmental services. NRC is a Great River, N.Y.-based provider of environmental, compliance and waste management services.

Total Safety holds steady

Also in trading, Total Safety’s $330 million six-year first-lien term loan (B3/B-) and $37.5 million six-year delayed-draw first-lien term loan (B3/B-) strip was quoted at 93 bid, 95 offered on Wednesday morning, in line with where it freed to trade on Tuesday night, a market source remarked.

Pricing on the term loan debt is Libor plus 600 bps with a 1% Libor floor, and it was sold at an original issue discount of 93. The debt has 101 soft call protection for one year. The delayed-draw piece has a ticking fee of half the margin for days 31 to 60 and the full margin thereafter.

During syndication, the delayed-draw loan was downsized from $75 million and the delayed-draw period was reduced to six months from one year, pricing on the first-lien term loan debt was increased from Libor plus 550 bps, the floor was revised from 0%, the discount widened from 98, the call protection was extended from six months, the maturity was shortened from seven years, amortization was sweetened to 5% per annum from 1% per annum, and the company made a number of changes to documentation.

Total Safety getting revolver

In addition to the first-lien term loan debt, Total Safety’s $442.5 million of credit facilities include a $75 million ABL revolver.

Goldman Sachs Bank USA, Citizens Bank and Credit Suisse Securities (USA) LLC are leading the deal that will be used to fund the acquisition of Sprint Safety, to refinance existing debt at Total Safety and to pay transaction-related fees and expenses.

Littlejohn is the sponsor.

Total Safety is a Houston-based provider of outsourced safety and compliance solutions. Sprint Safety is a provider of safety equipment rentals, breathable air solutions, training and turnaround management.

US Foods accelerated

Back in the primary market, US Foods moved up the commitment deadline for its $1.5 billion seven-year incremental senior secured term loan B to 3 p.m. ET on Wednesday from noon ET on Thursday, a market source said.

Talk on the term loan is Libor plus 200 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

J.P. Morgan Securities LLC and BofA Securities Inc. are leading the deal that will be used with existing liquidity resources to fund the $1.8 billion acquisition of SGA’s Food Group of Companies.

Closing is subject to regulatory approval and other customary conditions.

US Foods is a Rosemont, Ill.-based food company and foodservice distributor. SGA’s Food Group of Companies is a Scottsdale, Ariz.-based provider of foodservice solutions.

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