CoAdvantage, Autokiniton, Merrill, MKS break; CSC, APi, Shutterfly, Cerence, ALKU updated

By Sara Rosenberg

New York, Sept. 26 – CoAdvantage (AQ Carver Buyer Inc.) lifted the Libor floor on its first-lien term loan, extended the call protection and shortened the maturity, and Autokiniton Global Group finalized the original issue discount on its term loan B at the wide end of revised guidance, and then both deals freed to trade on Thursday.

Also, Merrill Corp. set pricing on its term loan at the low end of guidance, increased the Libor floor and modified documentation before making its way into the secondary market, and MKS Instruments Inc.’s term loan B-6 broke as well.

In other news, CSC Holdings LLC upsized its term loan B and tightened the issue price, APi Group Inc. trimmed the spread on its term loan B, and Shutterfly Inc. upsized its term loan, divided the debt into institutional and underwriter tranches, and set the issue price on the institutional piece at the wide side of revised talk.

Additionally, Cerence Inc. came out with a new round of changes, this time downsizing its term loan B, widening the spread and original issue discount again, adding a covenant and making further revisions to documentation.

Furthermore, ALKU LLC increased pricing on its term loan B, and Stonepeak Lonestar, HCA Inc. and SRS Distribution Inc. released price talk with launch.

CoAdvantage modified

CoAdvantage increased the Libor floor on its $325 million covenant-lite first-lien term loan (B2/B) to 1% from 0%, pushed out the 101 soft call protection to one year from six months and cut the maturity to six years from seven years, according to a market source.

Also, the company revised the incremental unlimited ratio, debt incurrence, mandatory prepayments, unlimited junior debt prepayment, unlimited restricted prepayments, available amount starter basket, general restricted payments, general investments, investments in non-loan parties, EBITDA add-backs and reporting requirements.

Pricing on the first-lien term loan is Libor plus 500 basis points with an original issue discount of 99.

Previously in syndication, the spread on the first-lien term loan was flexed up from Libor plus 450 bps and the discount widened from 99.5.

The company’s $500 million of credit facilities also include a $45 million revolver (B2/B) and a $130 million eight-year covenant-lite second-lien term loan (Caa2/CCC).

CoAdvantage frees up

On Thursday, CoAdvantage’s first-lien term loan broke for trading and levels were quoted at 99 bid, par offered, another source added.

Deutsche Bank Securities Inc., Antares Capital and Madison Capital are leading the deal that will be used to help fund the buyout of the company by Aquiline Capital Partners from investment funds managed by Morgan Stanley Capital Partners.

Closing is subject to customary conditions, including regulatory approvals.

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

Autokiniton firms

Autokiniton set the original issue discount on its $250 million term loan B (B2/B+) due May 2025 at 95, the wide end of revised talk of 95 to 96 and wide of initial talk of 98.5, a market source remarked.

Pricing on the term loan B is Libor plus 575 bps with a 0% Libor floor and the debt has 101 soft call protection for one year.

The company’s $475 million of senior secured credit facilities also include a $100 million pre-placed term loan A due March 2024 priced at Libor plus 525 bps with a 0% Libor floor and a $125 million incremental ABL revolver. The term loan A has 101 soft call protection for six months.

Earlier in syndication, the term loan B was downsized from $400 million, pricing was lifted from talk in the range of Libor plus 525 bps to 550 bps, the call protection was extended from six months and amortization was increased from 1% per annum. Also, the term loan A was added to the capital structure, and changes were made to MFN, the pari debt incurrence test, the unlimited restricted payment test and the unlimited investments test.

Autokiniton breaks

Autokiniton’s term loan B freed to trade late in the day, with levels quoted at 95¼ bid, 96¼ offered, another source added.

Goldman Sachs Bank USA, BofA Securities, Inc., Barclays, RBC Capital Markets and KKR Capital Markets are leading the credit facilities that will be used with equity to fund the acquisition of Tower International Inc. for $31.00 per share in cash. Including Tower’s debt and pension related liabilities, the total value of the transaction is about $900 million.

Closing is subject to the tender of at least a majority of the outstanding shares of Tower common stock and regulatory approval.

Autokiniton, a portfolio company of KPS Capital Partners, is a New Boston, Mich.-based supplier of metal-formed components and complex assemblies to the automotive industry. Tower is a Livonia, Mich.-based manufacturer of engineered automotive structural metal components and assemblies.

Merrill updated, trades

Merrill set pricing on its $400 million seven-year first-lien term loan (B2/B) at Libor plus 500 bps, the low end of the Libor plus 500 bps to 525 bps talk and revised the Libor floor to 1% from 0%, according to a market source.

Additionally, changes were made to the excess cash flow sweep, unlimited restricted payments, unlimited restricted debt payments, unlimited investments, the incremental ratio test, the use of a builder for restricted payments and restricted debt payments, the EBITDA definition and reporting requirements, the source said.

As before, the term loan has an original issue discount of 99 and 101 soft call protection for six months.

Recommitments were due at 12:30 p.m. ET on Thursday and the loan broke for trading in the afternoon at 99½ bid, par ½ offered, another source added.

Goldman Sachs Bank USA and Credit Suisse Securities (USA) LLC are leading the deal that will be used to refinance an existing term loan B and fund a dividend to shareholders.

Merrill is a St. Paul, Minn., SaaS-based provider of secure collaboration solutions for professionals.

MKS hits secondary

Another deal to free up was MKS Instruments’ $896.8 million first-lien term loan B-6 due Feb. 1, 2026, with levels quoted at par bid, par ½ offered, a market source remarked.

Pricing on the term loan is Libor plus 175 bps with a 0% Libor floor and it was sold at an original issue discount of 99.75. The debt has 101 soft call protection for six months.

Barclays is leading the deal that will be used to reprice an existing $298.5 million first-lien term loan B-4 from Libor plus 200 bps with a 0.75% Libor floor and an existing $648.4 million first-lien term loan B-5 from Libor plus 225 bps with a 0% Libor floor, and extend the maturity of the B-4 loan to match the Feb. 1, 2026 maturity of the B-5 loan. There will be a $50 million paydown of the pro forma facility at close.

MKS is an Andover, Mass.-based provider of instruments, subsystems and process control solutions that measure, control, power, monitor and analyze critical parameters of advanced manufacturing processes.

CSC sets changes

Back in the primary market, CSC Holdings raised its term loan B due April 2027 to $3 billion from $1.5 billion and firmed the issue price at par, the tight end of revised talk of 99.875 to par and tighter than initial talk of 99.75, according to a market source.

The term loan is still priced at Libor plus 250 bps with a 0% Libor floor, and still has 101 soft call protection for six months.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance an existing term loan B-4 and to repay 8% senior notes at Cablevision, and, due to the upsizing, to refinance a term loan B-2 and for general corporate purposes.

CSC Holdings, an indirect wholly owned subsidiary of Altice USA Inc., is a Bethpage, N.Y.-based cable operator.

APi cuts pricing

APi Group lowered the spread on its $1.2 billion seven-year senior secured covenant-lite term loan B to Libor plus 250 bps from talk in the range of Libor plus 275 bps to 300 bps, and left the 0% Libor floor, original issue discount of 99.5 and 101 soft call protection for six months intact, a market source said.

The company’s $1.5 billion of credit facilities (Ba3/BB-) also include a $300 million revolver.

Commitments are due at 10 a.m. ET on Friday and allocations are expected thereafter, the source added.

Citigroup Global Markets Inc., BofA Securities, Inc., Barclays and UBS Investment Bank are leading the deal that will be used with cash on hand, an early warrant exchange and rollover equity from existing shareholders to fund the acquisition of the company by J2 Acquisition Ltd. for about $2.05 billion in cash and 28,373,000 ordinary shares in J2. The transaction is valued at about $2.9 billion.

Closing is expected on Tuesday.

Upon closing, J2, a special-purpose acquisition entity, intends to change its name to APi Group Corp.

APi is a New Brighton, Minn.-based provider of commercial life safety solutions and industrial specialty services, and a specialty contractor.

Shutterfly revised

Shutterfly raised its seven-year first-lien term loan to $1.03 billion from $1 billion and split the debt into a $750 million institutional tranche priced at Libor plus 600 bps and a $280 million underwriter tranche priced at Libor plus 650 bps, according to a market source.

Also, the original issue discount on the institutional piece firmed at 95, the wide end of most recent talk of 95 to 96 and wide of revised talk of 97 and initial talk in the range of 98 to 99, and amortization was changed to 7% per annum from revised talk of 6.5% per annum and original guidance of 5% per annum, the source said. The loan has a mandatory prepayment of minimum $100 million at year end 2019.

The underwriter tranche was issued at a discount of 95 and has amortization of 1% per annum.

Previously in syndication, the institutional term loan was downsized from $1.285 billion, pricing was increased from revised talk of Libor plus 550 bps and initial talk of Libor plus 525 bps, and changes were made to, among other things, MFN, incremental, debt/lien baskets, restricted payments and EBITDA definition.

The company’s now $1.33 billion of senior secured credit facilities (B1/B) also include a $300 million revolver.

Shutterfly lead banks

Barclays, Citigroup Global Markets Inc., SunTrust Robinson Humphrey Inc., Credit Suisse Securities (USA) LLC, BMO Capital Markets, BNP Paribas Securities Corp., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., RBC Capital Markets LLC, Mizuho and UBS Investment Bank are leading Shutterfly’s credit facilities.

Recommitments are due at 9 a.m. ET on Friday, the source added.

The credit facilities will be used with $785 million of senior secured notes, upsized from $500 million when the term loan was downsized, and equity to fund Shutterfly’s buyout by Apollo Global Management LLC for $51.00 per share in cash, or an enterprise value of about $2.7 billion, and the buyout of Snapfish LLC. Shutterfly and Snapfish will then be merged into one company.

Closing is expected by early in the fourth quarter, subject to customary conditions, including approval by Shutterfly stockholders and regulatory approval.

Shutterfly is a Redwood City, Calif.-based retailer and manufacturing platform for personalized products and communications. Snapfish is a San Francisco-based internet-based retailer of photography products.

Cerence reworked

Cerence trimmed its five-year first-lien term loan B to $300 million from $425 million, lifted pricing to Libor plus 600 bps from most recent talk of Libor plus 525 bps, talk prior to that in the range of Libor plus 425 bps to 450 bps and initial talk of Libor plus 375 bps, and widened the original issue discount to 95 from most recent guidance of 98, talk prior to that of 99 and initial talk in the range of 99 to 99.5, according to a market source.

Also, a 6x first-lien net leverage ratio covenant was added to the previously covenant-lite term loan, and amortization was changed to 3.5% in years one and two, 7% in years three and four and 10% thereafter from revised talk of 2.5% in years one and two, 5% in years three and four and 7.5% onwards and initial talk of 1% per annum.

In addition, the excess cash flow sweep, the ratio investments, the ratio restricted payments and ratio restricted debt payments were all updated for a second time.

The term loan still has a 1% Libor floor.

Previously in syndication, the Libor floor on the term loan was revised from 0%, the maturity was shortened from seven years, and revisions were made to MFN, incremental, asset sale sweep, available amount, debt/liens basket and EBITDA.

Cerence new deadline

With this round of revisions, Cerence scheduled a new commitment deadline for noon ET on Friday, the source added.

The company’s now $375 million of credit facilities also include a $75 million revolver.

Barclays is the left lead on the deal that will be used to support the spinoff of Nuance Communications Inc.’s automotive software business segment into a new, independent, publicly traded company named Cerence.

Cerence is a Burlington, Mass.-based builder or automotive cognitive assistance solutions to power natural and intuitive interactions between automobiles, drivers and passengers, and the broader digital world.

ALKU flexes

ALKU widened pricing on its $218 million term loan B to Libor plus 550 bps from Libor plus 500 bps, and left the 0% Libor floor, original issue discount of 99 and 101 soft call protection for six months unchanged, a market source remarked.

The company’s $248 million of credit facilities (B2/B-) also include a $30 million revolver.

Commitments are due by the end of the day on Friday, the source added.

Societe Generale and SunTrust Robinson Humphrey Inc. are leading the deal that will be used to help fund the buyout of the company by FFL Partners.

ALKU is an Andover, Mass.-based provider of temporary and contractual consultants in the technology, health care IT, life sciences and government sectors.

Stonepeak reveals talk

In more primary happenings, Stonepeak Lonestar held its bank meeting on Thursday and announced price talk on its $800 million term loan B (B1) at Libor plus 425 bps with a 0% Libor floor and an original issue discount of 99, according to a market source.

Macquarie Capital (USA) Inc., Natixis and Credit Agricole are leading the deal that will be used for a recapitalization.

Stonepeak Lonestar is the holder of Stonepeak Infrastructure Partners’ interests in the Gulf Coast Express Pipeline, Grand Prix Pipeline and Targa Resources Corp.’s fractionation train 6 in Texas in a joint venture with Targa.

HCA shops loan

HCA launched a $1.478 billion term loan at talk of Libor plus 175 bps with an original issue discount of 99.875 to par, a market source said.

Commitments are due on Oct. 3, the source added.

BofA Securities Inc. is leading the deal that will be used to reprice a term loan B-10 down from Libor plus 200 bps.

HCA is a Nashville, Tenn.-based health care services provider.

SRS launches

SRS Distribution held a call during the session to launch a $250 million incremental term loan (B3/B) talked at Libor plus 400 bps to 425 bps with an original issue discount of 99, according to a market source.

BofA Securities Inc., Barclays and UBS Investment Bank are leading the deal that will be used to repay revolver borrowings and to fund future acquisitions.

SRS Distribution is a McKinney, Texas-based roofing products distributor.

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