Inmarsat, Sotheby’s, Wells, MeridianLink break; Shutterfly, PeroxyChem, ECi updated

By Sara Rosenberg

New York, Sept. 23 – Inmarsat plc reduced the size of its term loan B for a second time, increased the Libor floor, set the original issue discount at the wide end of revised guidance and sweetened the call protection before freeing up for trading on Monday.

Also, Sotheby’s downsized its term loan B, widened the spread, Libor floor and original issue discount, extended the call protection, made some changes to documentation and freed to trade during the session, and deals from Wells Enterprises Inc. and MeridianLink broke as well.

In more happenings, Shutterfly Inc. came out with a slew of adjustments to documentation for its term loan B, PeroxyChem added a pricing step-down to its term loan B, and ECi Software Solutions tightened the issue price on its incremental first-lien term loan.

Additionally, Go Daddy Operating Co. LLC released price talk with launch, and BellRing Brands LLC, Hard Rock Northern Indiana (Spectacle Gary Holdings LLC), Shift4 Payments LLC and Allison Transmission Inc. joined this week’s primary calendar.

Inmarsat sets changes

Inmarsat trimmed its seven-year term loan B to $1.75 billion from a revised amount of $2 billion and an initial size of $2.7 billion, changed the Libor floor to 1% from 0%, firmed the original issue discount at 98, the wide end of revised talk in the range of 98 to 99 and wide of initial talk of 99, and extended the 101 soft call protection to one year from six months, according to a market source.

Pricing on the term loan remained at Libor plus 450 basis points.

Last week, the spread on the term loan was flexed up from talk in the range of Libor plus 400 bps to 425 bps and changes were made to documentation.

The company’s now $2.45 billion of credit facilities also include a $700 million revolver.

Barclays, BofA Securities, Inc., UBS Investment Bank, BNP Paribas Securities Corp., HSBC Securities (USA) Inc., ING, Natixis, NatWest, SMBC, MUFG, DNB, Bank of Nova Scotia and Mizuho are leading the deal.

Inmarsat starts trading

On Monday, Inmarsat’s credit facilities allocated and broke for trading, with the term loan quoted at 98 1/8 bid, 98 5/8 offered, another source added.

The credit facilities will be used to help fund the buyout of Inmarsat by Apax, Warburg Pincus, Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board for $7.21 in cash per share, or about $3.4 billion.

The transaction will also be funded with $2.075 billion of senior secured notes, which were upsized from a revised amount of $1.825 billion and an initial size of $1.125 billion in connection with the changes to the term loan size.

Closing is expected in mid-November, subject to regulatory clearances and other conditions.

Inmarsat is a London-based satellite telecommunications company.

Sotheby’s reworked

Sotheby’s scaled back its term loan B due January 2027 to $500 million from $550 million and firmed the spread at Libor plus 550 bps, the high end of revised talk of Libor plus 525 bps to 550 bps and up from initial talk in the range of Libor plus 450 bps to 475 bps, according to a market source.

Additionally, the company revised the Libor floor on the term loan to 1% from 0%, changed the original issue discount to 98 from 99 and extended the 101 soft call protection to one year from six months

Also, the MFN was modified to 50 bps for life from 75 bps and all carve-outs were removed, the permitted earlier maturity debt basket was removed, and the company is now required to hold quarterly investor calls.

And, under restricted payments, the unlimited basket was revised to 4x from 4.5x, the general basket was changed to the greater of $45 million and 20% of EBITDA from the greater of $65 million and 30% of EBITDA, and a cap of $25 million was added on investments in non-guarantor restricted subsidiaries, the source said.

The company’s now $900 million of credit facilities (B1/B+) also include a $400 million revolver.

Sotheby’s frees up

Sotheby’s term loan B emerged in the secondary market late in the day, with levels quoted at 98¼ bid, 99¼ offered, another source added.

Proceeds from the credit facilities and $600 million of senior secured notes, upsized from $550 million, will be used to help fund the acquisition of Sotheby’s by BidFair USA for $57 in cash per share of common stock in a transaction with an enterprise value of $3.7 billion.

BNP Paribas Securities Corp. and Goldman Sachs Bank USA are the joint physical bookrunners on the credit facilities.

Closing is expected in the fourth quarter, subject to customary conditions, including regulatory clearance and shareholder approvals. The transaction is not subject to the availability of financing.

Sotheby’s is a New York-based auction house.

Wells Enterprises breaks

Wells Enterprises’ $185 million add-on covenant-lite term loan B (B1/BB-) due 2025 began trading too, with levels quoted at par bid, 101 offered, a trader remarked.

Pricing on the add-on term loan is Libor plus 300 bps with a step-down to Libor plus 275 bps when issuer ratings are Ba3/BB- with stable outlooks or better 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, pricing on the term loan finalized at the low end of the Libor plus 300 bps to 325 bps talk, the step-down was added and the discount was changed from 99.5.

BMO Capital Markets is leading the deal that will be used to fund the acquisition of the Halo Top ice cream brand from Eden Creamery LLC.

Closing is expected on Friday.

Wells Enterprises is a Le Mars, Iowa-based ice cream and frozen treat manufacturer.

MeridianLink hits secondary

MeridianLink’s fungible $60 million incremental first-lien term loan freed to trade as well, with levels seen at 99 bid, 99½ offered, according to a market source.

Pricing on the incremental term loan is Libor plus 400 bps with a 1% Libor floor and it was sold at an original issue discount of 99.

Antares Capital and Golub Capital are leading the deal.

The company’s existing first-lien term loan is sized at about $352 million.

MeridianLink is a Costa Mesa, Calif.-based provider of SaaS-based solutions to financial institutions that simplify loan decisioning, deposit/loan originations and workflow challenges. The company was formed by Thoma Bravo LLC in June 2018 via the combination of MeridianLink Inc. and CRIF Lending Solutions.

Shutterfly tweaked

Back in the primary market, Shutterfly made a bunch of changes to documentation for its $1 billion seven-year first-lien term loan B, such as changing the MFN to 50 bps with no sunset from 18 months with a sunset, a market source said.

In addition, debt/liens were revised to tighten the incremental free-and-clear to the greater of $250 million and 0.6x LTM EBITDA from the greater of $430 million and 1x LTM EBITDA, tighten the incremental ratio to 3.6x net first-lien leverage from 4.1x net first-lien leverage, and revise the junior lien incremental ratio to 3.85x from 4.60x, remove the 5.3x total net leverage prong for incremental unsecured debt incurrence.

Also, the general debt/lien baskets were educed to the greater of $200 million and 0.45x LTM EBITDA from the greater of $285 million and 0.67x LTM EBITDA, lien conditions around the ability to incur capital leases/purchase money debt were tightened and the contribution debt basket was reduced to 100% from 200%.

Other changes included removing the leveraged based asset sale mandatory repayment step downs, reducing the reinvestment period following asset sale to 15 months from 18 months, adding a cap on investments in non-guarantor restricted subsidiaries of the greater of $100 million and 0.25x LTM EBITDA, reducing investments in unrestricted subsidiaries to the greater of $50 million and 0.125x LTM EBITDA from the greater of $105 million and 0.25x LTM EBITDA, and modifying the unlimited investment ratio to 3.5x net total leverage from 4.3x.

Shutterfly restricted payments

Regarding restricted payments, Shutterfly set the blocker at until Dec. 31, 2020 instead of until Feb. 15, 2020, the available restricted payment capacity amount basket that can be used to incur debt was deleted, the unlimited ratio restricted payment/junior debt baskets were tightened to 3.5x total net leverage from 4.05x, the restricted payment general basket was changed to the greater of $50 million and 0.125x LTM EBITDA from the greater of $130 million and 0.3x LTM EBTIDA, and the cumulative credit (available amount) basket was modified to the greater of $50 million and 0.125x LTM EBITDA from the greater of $130 million and 0.3x LTM EBTIDA, the source continued.

Furthermore, the repayment of Apollo notes would be a restricted payment if net first-lien leverage is more than 3.75x and repaid with balance sheet cash or first-lien debt, and, therefore, would be subject to the blocker, versus no restriction previously, and the 7% market capitalization dividend prong was removed.

Under the EBITDA definition, the company added a 24 month time horizon and a 20% cap for future addbacks, versus no caps or time horizon requirement previously.

Shutterfly deadline

With the changes to documentation, Shutterfly extended the commitment deadline for the term loan B to 5 p.m. ET on Tuesday from 5 p.m. ET on Monday, the source added.

Pricing on the term loan B is Libor plus 550 bps with a 0% Libor floor and an original issue discount of 97.

Earlier in syndication, the term loan was downsized from $1.285 billion, pricing was increased from Libor plus 525 bps, the discount widened from talk in the range of 98 to 99 and amortization was changed to 6.5% per annum from 5% per annum.

The company’s $1.3 billion of senior secured credit facilities (B1/B) also include a $300 million revolver.

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 the deal.

Shutterfly being acquired

Proceeds from Shutterfly’s credit facilities will be used to help fund its 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.

Other funds for the transaction will come from $785 million of senior secured notes, upsized from $500 million when the term loan was downsized, and equity.

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.

PeroxyChem adds step

PeroxyChem added a step-down to its $315 million first-lien term loan B to Libor plus 475 bps at total net leverage below 4x with a six month holiday, according to a market source.

Initial pricing on the term loan was unchanged at Libor plus 500 bps with a 0% Libor floor and an original issue discount of 99.5.

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

The company’s $345 million of credit facilities also include a $30 million revolver.

Commitments were due at 5 p.m. ET on Monday, the source said.

Barclays is leading the deal that will be used to fund a one-time dividend to shareholders, repay existing debt, and pay related fees and expenses.

One Equity Partners is the sponsor.

PeroxyChem is a Philadelphia-based supplier of peroxygen and adjacent chemistries.

ECi Software updated

ECi Software Solutions changed the original issue discount on its fungible $96 million incremental first-lien term loan to 99.5 from 99, a market source said.

The original issue discount on the fungible $28 million incremental second-lien term loan remained at 99.

The first-lien term loan is priced at Libor plus 425 bps with a 1% Libor floor and the second-lien term loan is priced at Libor plus 800 bps with a 1% Libor floor.

As before, the incremental and existing first-lien loans are getting 101 soft call protection for six months.

Recommitments were due by the end of business on Monday and allocations are targeted for Tuesday, the source said.

Golub Capital is leading the deal that will be used to fund the acquisition of Trivest Beheer BV, a Netherlands-based provider of smart vertical software solutions to the SME manufacturing sector.

Closing is expected in the third quarter, subject to customary conditions including regulatory approval.

ECi is a Fort Worth-based provider of enterprise resource planning software solutions to businesses across the distribution, field services, building and construction and manufacturing industries.

Go Daddy holds call

Go Daddy held a lender call at 2 p.m. ET on Monday and launched a $1,844,900,000 first-lien term loan B due Feb. 15, 2024 talked at Libor plus 175 bps with a 0% Libor floor, an original issue discount of 99.875 to par and 101 soft call protection for six months, a market source remarked.

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

Barclays is leading the deal that will be used to reprice an existing first-lien term loan B.

Go Daddy is Scottsdale, Ariz.-based provider of web hosting and domain names.

BellRing coming soon

BellRing Brands scheduled a bank meeting for 2:30 p.m. ET in New York on Tuesday to launch an $820 million seven-year covenant-lite first-lien term loan (B), according to a market source.

The term loan has 101 soft call protection for six months, the source said.

Commitments are due at 5 p.m. ET on Oct. 8.

Credit Suisse Securities (USA) LLC, BofA Securities, Inc., Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Barclays are leading the deal that will be used to repay corporate debt concurrent with the company’s initial public offering of common stock.

Based on an S-1 filed with the Securities and Exchange Commission on Friday, the company is also expected to get an about $200 million revolver (B).

BellRing, currently owned by Post Holdings Inc., is a St. Louis-based active nutrition brand.

Hard Rock readies loan

Hard Rock Northern Indiana will hold a bank meeting at 10 a.m. ET in New York on Wednesday to launch a $350 million six-year first-lien term loan, of which $25 million is delayed-draw, a market source said.

Commitments are due at 5 p.m. ET on Oct. 10, the source added.

Credit Suisse Securities (USA) LLC and Wells Fargo Securities LLC are leading the deal that will be used to fund the construction of the Hard Rock Northern Indiana.

Hard Rock Northern Indiana is a land-based casino in Gary, Ind.

Shift4 on deck

Shift4 Payments set a lender call for 3 p.m. ET on Tuesday to launch a fungible $70 million incremental covenant-lite first-lien term loan due November 2024 that is talked with an original issue discount in the range of 99 to 99.5, a market source remarked.

Like the existing first-lien term loan, the incremental term loan is priced at Libor plus 450 bps with a 1% Libor floor.

Commitments are due at 5 p.m. ET on Oct. 1, the source added.

Credit Suisse Securities (USA) LLC is the left lead on the deal, which will be used to repay revolver borrowings.

Shift4, formerly known as Lighthouse Network LLC, is an Allentown, Pa.-based independent merchant acquiring payment solutions and point of sale software provider.

Allison joins calendar

Allison Transmission emerged with plans to hold a lender call at 1 p.m. ET on Tuesday to launch a new loan to current and prospective lenders, according to a market source.

Citigroup Global Markets Inc. is leading the deal.

Allison Transmission is an Indianapolis-based automatic transmission company and supplier of hybrid-propulsion systems.

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