Ontic term loan frees to trade; BrandSafway price talk emerges; CoAdvantage readies deal

By Sara Rosenberg

New York, July 18 – Ontic (Bleriot US Bidco Inc.) increased the size of its first-lien term loan B, lowered the spread and finalized the original issue discount at the tight end of guidance, and then the debt made its way into the secondary market on Tuesday.

In more happenings, BrandSafway released price talk on its first-lien term loan B in connection with its lender call, and CoAdvantage (AQ Carver Buyer Inc.) joined this week’s new issue calendar.

Ontic tweaked

Ontic lifted its covenant-lite first-lien term loan B due October 2028 to $957 million from $937 million, by increasing the incremental amount included in the tranche to $120 million from up to $100 million, trimmed pricing to SOFR plus 400 basis points from SOFR plus 425 bps and set the original issue discount at 99.5, the tight end of the 99 to 99.5 talk, a market source remarked.

As before, the term loan has a 0% floor, CSA of 11.4 bps one-month rate, 26.2 bps three-month rate and 42.8 bps six-month rate, and 101 soft call protection for six months.

The company’s now $1.042 billion of credit facilities (B2/B) also include an $85 million revolver due July 2028.

Nomura Securities, Barclays, Macquarie Capital (USA) Inc. and KKR Capital Markets are leading the deal.

Ontic hits secondary

Recommitments for Ontic’s term loan were due at 11:30 a.m. ET on Tuesday and the debt freed to trade later in the day, with levels quoted at par bid, par ˝ offered, another source added.

The credit facilities will be used to extend an existing revolver from October 2024, to extend from October 2026 and combine into one tranche an existing term loan B priced at SOFR+CSA plus 400 bps with a 0% floor and an existing term loan B-2 priced at SOFR+CSA plus 450 bps with a 0% floor, and the incremental loan will repay outstanding revolver borrowings and fund general corporate purposes.

Ontic is a provider of OEM-licensed parts and aftermarket services for mature aerospace and defense platforms.

BrandSafway guidance

BrandSafway held its lender call on Tuesday morning and announced talk on its $1.335 billion seven-year first-lien term loan B (B3/B-) at SOFR plus 550 bps with a 0.5% floor, an original issue discount of 96 and 101 soft call protection for six months, a market source remarked.

Commitments are due on July 25, the source added.

Goldman Sachs Bank USA, JPMorgan Chase Bank, Barclays, Natixis, ING, Societe Generale, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Credit Agricole, UBS Investment Bank, Morgan Stanley Senior Funding Inc. and SMBC are leading the loan that will be used with other senior secured debt and a sponsor equity contribution to refinance the company’s existing first-lien term loan due 2024 and senior unsecured notes due 2025.

CD&R and Brookfield are the sponsors.

BrandSafway is an Atlanta-based provider of specialty craft services to industrial, commercial and infrastructure markets.

CoAdvantage on deck

CoAdvantage set a lender call for 10 a.m. ET on Wednesday to launch a $550 million six-year term loan B, according to a market source.

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

Commitments are due at 5 p.m. ET on July 27, the source added.

Deutsche Bank Securities Inc. is the left lead on the deal that will be used to refinance first- and second-lien debt and to pay a dividend.

CoAdvantage is a Tampa, Fla.-based professional employer organization and a provider of strategic human resource solutions.

Fund flows

In other news, actively managed loan fund flows on Monday were negative $41 million and loan ETFs were positive $10 million, market sources said.

Inflows for loan funds week to date total an estimated $71 million, compared to outflows in the prior week of $137 million, sources added.

Loan indices rise

IHS Markit’s iBoxx loan indices were stronger on Monday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.06% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.01%.

Month to date, the MiLLi is up 1.02% and year to date it is up 7.31%, and the LLLi is up 0.9% month to date and up 7.1% year to date.

Average secondary market bids in the U.S. on Monday were 92.17, up 0.01% from the previous day and up 0.32% year to date.

According to the IHS Markit data, some of the top advancers on Monday were Rodan & Fields’ June 2018 covenant-lite term loan B at 79, up from 77.25, Sound Physicians’ June 2018 term loan at 57.03, up from 56.1, and Air Methods’ April 2017 covenant-lite term loan B at 34.71, up from 34.22.

Some top decliners on Monday were Numericable/YPSO/Altice’s July 2018 covenant-lite term loan B-13 at 92.13, down from 94.53, Numericable/YPSO/Altice’s January 2023 U.S. term loan B-14 at 85.25, down from 87.08, and CenturyLink/Lumen’s January 2020 covenant-lite term loan B at 73.55, down from 74.96.

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