Warner, WellSky, Go Daddy, Corel break; Leslie’s, Ultra Clean, ADS Tactical tweak deals

By Sara Rosenberg

New York, March 3 – Warner Music Group (WMG Acquisition Corp.) finalized the issue price on its incremental first-lien term loan at the tight end of guidance, and then the debt broke for trading on Wednesday.

Other deals to make their way into the secondary market during the session included WellSky, Go Daddy Operating Co. LLC and Corel Corp.

In other news, Leslie’s Poolmart Inc. trimmed pricing on its term loan B, tweaked the step-down and tightened the original issue discount, and Ultra Clean Holdings Inc. lowered the spread on its incremental first-lien term loan, added a pricing step-down and added a repricing of its existing term loan.

Also, ADS Tactical Inc. reduced the size of its term loan B, widened the spread, floor and original issue discount, sweetened the call protection and shortened the maturity, EG Group upsized its second-lien term loan, and Playtika Holding Corp. accelerated the commitment deadline for its first-lien term loan.

Furthermore, Kenan Advantage Group Inc., Flow Control Group (Flow Merger Sub Inc.), EyeSouth Partners (SCP Eye Care Services LLC), Cowen Inc., Watlow and Denali Water Solutions LLC announced price talk with launch.

Additionally, Sorenson Communications LLC, Avast Software, Hudson River Trading, WildBrain and Churchill Downs Inc. surfaced with new deal plans.

Warner updated, trades

Warner Music Group set the issue price on its fungible $325 million incremental covenant-lite first-lien term loan due January 2028 at par, the tight end of the 99.875 to par talk, according to a market source.

Like the existing term loan, the incremental term loan is priced at Libor plus 212.5 basis points with a 0% Libor floor and has 101 soft call protection through July.

The term loan freed to trade on Wednesday afternoon, with levels quoted at par bid, par ½ offered, another source added.

Credit Suisse Securities (USA) LLC is the left lead on the deal that will be used to refinance existing senior notes.

Warner Music is a New York-based music entertainment company.

WellSky frees up

WellSky’s $1.125 billion seven-year first-lien term loan B (B) began trading during the session, with levels quoted at 99¾ bid, par 1/8 offered, a market source said.

Pricing on the term loan is Libor plus 325 bps with a 0.75% Libor floor and it was sold at an original issue discount of 99.5. The debt has 101 soft call protection for six months.

During syndication, the spread on the term loan was lowered from Libor plus 375 bps.

BofA Securities Inc., Goldman Sachs Bank USA, Deutsche Bank Securities Inc., BMO Capital Markets, RBC Capital Markets, Nomura and TPG are leading the deal that will be used to help refinance existing first-and second-lien term loans.

WellSky is an Overland Park, Kan.-based provider of healthcare enterprise software and related services.

Go Daddy breaks

Go Daddy’s $746 million senior secured first-lien term loan B due Aug. 10, 2027 also freed up, with levels quoted at par bid, par ¼ offered according to a market source.

Pricing on the term loan is Libor plus 200 bps with a 0% Libor floor and it was issued at par. The debt has 101 soft call protection for six months.

Barclays is the left lead on the deal that will be used to refinance/reprice an existing first-lien term loan B-3 due Aug. 10, 2027 priced at Libor plus 250 bps with a 0% Libor floor.

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

Corel hits secondary

Corel’s fungible $100 million add-on first-lien term loan broke for trading too, with levels quoted at 99½ bid, par ½ offered, a market source remarked.

Pricing on the add-on term loan is Libor plus 500 bps with a 0% Libor floor, in line with existing term loan pricing, and the new debt was sold at an original issue discount of 99.

During syndication, the add-on term loan was upsized from $75 million.

KKR Capital Markets, Citigroup Global Markets Inc. and Barclays are leading the deal that will be used to repay some second-lien term loan borrowings.

Corel is an Ottawa-based software company.

Leslie’s changes emerge

Back in the primary market, Leslie’s Poolmart cut pricing on its $810 million seven-year covenant-lite term loan B (B1/B+) to Libor plus 275 bps from Libor plus 300 bps, modified the 25 bps step-down to at 2.75x net first-lien leverage from at 3x net first-lien leverage, and moved the original issue discount to 99.75 from 99.5, a market source remarked.

The term loan still has a 0.5% Libor 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.

Nomura, BofA Securities Inc., Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA and US Bank are leading the deal that will be used to refinance an existing term loan and pay related fees and expenses.

Closing is anticipated during the week of March 8.

Leslie’s Poolmart is a Phoenix-based retailer of swimming pool and spa care supplies and related products.

Ultra Clean revised

Ultra Clean trimmed pricing on its fungible $355 million incremental first-lien term loan due Aug. 27, 2025 to Libor plus 375 bps from Libor plus 450 bps and added a step-down to Libor plus 350 bps at Ba3/BB- corporate credit ratings, according to a market source.

The company also added a repricing of its existing roughly $273 million first-lien term loan to Libor plus 375 bps with a step-down to Libor plus 350 bps at Ba3/BB- corporate credit ratings from Libor plus 450 bps, the source said. The repricing is being offered at par.

The term loan debt still has a 0% Libor floor and 101 soft call protection for six months, and the incremental term loan is still being talked with an original issue discount of 99.5.

Recommitments and repricing signature pages were due at 5 p.m. ET on Wednesday, the source added.

Ultra buying Ham-Let

Ultra Clean will use the incremental term loan to fund the acquisition of Ham-Let (Israel-Canada) Ltd. for about $348 million, which includes $287 million of equity value plus $61 million of net debt.

Barclays is leading the deal.

Closingon the acquisition is expected late this quarter or early next quarter, subject to customary conditions.

Total leverage will be 2.9x, and net leverage will be 2x.

Ultra Clean is a Hayward, Calif.-based developer and supplier of critical subsystems, ultra-high purity cleaning, analytical and decontamination services for the semiconductor industry. Ham-Let is a manufacturer of Ultra-High Purity and industrial flow control systems largely used for the manufacturing of semiconductor devices.

ADS Tactical reworked

ADS Tactical scaled back its term loan B to $475 million from $700 million, lifted pricing to Libor plus 575 bps from talk in the range of Libor plus 425 bps to 450 bps, revised the Libor floor to 1% from 0.75%, changed the original issue discount to 98 from 99, modified the call protection to a 102 hard call for two years from a 101 soft call for six months, and shortened the maturity to five years from seven years, a market source remarked.

Recommitments are due at noon ET on Thursday, the source added.

JPMorgan Chase Bank, Wells Fargo Securities LLC, BofA Securities Inc., PNC Bank and TD Securities (USA) LLC are leading the deal that will be used to repay existing debt and fund a dividend, the amount of which was decreased with the term loan downsizing.

ADS is a Virginia Beach, Va.-based military equipment supplier that provides tactical equipment, procurement, logistics, government contracts and supply chain solutions.

EG Group upsizes

EG Group raised its second-lien term loan due April 2027, which is being issued by EG Finco Ltd., to €610 million from €330 million, and left talk at Euribor plus 700 bps to 725 bps with a 0% floor, a discount of 98.5 and call protection of 102 in year one and 101 in year two, a market source said.

As previously reported, the company is also getting a $450 million first-lien term loan B due March 2026, which is being issued by EG America LLC, that is talked at Libor plus 425 bps to 450 bps with a 0.5% Libor floor, a discount of 99 and 101 soft call protection for six months.

Commitments are due at noon ET on March 10.

EG Group leads

Bookrunners on EG Group’s second-lien term loan are Barclays, BofA Securities, Deutsche Bank, HSBC, Lloyds, Morgan Stanley and Rabobank.

Barclays is the lead left bookrunner on the first-lien term loan B and a joint global coordinator and bookrunner with JPMorgan and Rabobank. Other bookrunners include BofA Securities Inc., Deutsche Bank, ING, Lloyds, Morgan Stanley and SMBC.

Proceeds will be used to help fund the acquisition of Asda Group Ltd.’s forecourts for an enterprise value of £750 million and 285 petrol station forecourts in Southern Germany from OMV Deutschland GmbH for €485 million.

Funds from the second-lien term loan upsizing will be used to refinance in full an existing euro and U.S. second-lien term loan due April 2026, the source added.

EG Group is a Blackburn, U.K.-based convenience retail and fuel station company.

Playtika accelerated

Playtika moved up the commitment deadline for its $1.8 billion seven-year first-lien term loan (Ba2/BB) to 5 p.m. ET on Thursday from noon ET on Friday, according to a market source.

Talk on the term loan is Libor plus 300 bps with a 0.5% Libor floor, an original issue discount of 99 to 99.5 and 101 soft call protection for six months.

BofA Securities Inc., Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA and UBS Investment Bank are leading the deal that will be used to help refinance existing term loan borrowings.

Playtika is a mobile gaming company.

Kenan launches

Kenan Advantage Group held its lender call on Wednesday and announced talk on its $1 billion five-year covenant-lite term loan B at Libor plus 375 bps with a 0.75% Libor floor and an original issue discount of 99.5, a market source remarked.

The company’s $1.15 billion of credit facilities (B2/B) also include a $150 million revolver.

Commitments are due at noon ET on March 12, the source added.

KeyBanc Capital Markets LLC is the left lead on the deal that will be used to refinance existing credit facilities, including a term loan due 2022.

Kenan Advantage is a North Canton, Ohio-based tank truck transporter and logistics provider.

Flow Control talk

Flow Control Group disclosed price talk on its $625 million seven-year covenant-lite first-lien term loan, which includes a $100 million delayed-draw tranche, and $110 million eight-year covenant-lite second-lien term loan with its morning call, according to a market source.

Talk on the first-lien term loan debt is Libor plus 375 bps to 400 bps with a 0.5% Libor floor and an original issue discount of 99.5, and talk on the second-lien term loan is Libor plus 700 bps to 725 bps with a 0.5% Libor floor and a discount of 99, the source said.

The delayed-draw term loan has a ticking fee of 0.75% starting on day 61, the first-lien term loan has 101 soft call protection for six months, and the second-lien term loan has call protection of 102 in year one and 101 in year two.

Commitments are due at 5 p.m. ET on March 16.

Flow being acquired

Flow Control’s term loans will be used to help fund its buyout by KKR from Bertram Capital and to finance deals under letters of intent.

Credit Suisse Securities (USA) LLC, UBS Investment Bank and KKR Capital Markets are leading the deal, with Credit Suisse the left lead on the first-lien loan and UBS the left lead on the second-lien loan.

Flow Control is a Charlotte, N.C.-based distributor and technical adviser for mission critical flow control and industrial automation products and related services.

EyeSouth guidance

EyeSouth Partners held its meeting at 2 p.m. ET and, a few hours before the call began, talk on its $375 million seven-year senior secured first-lien term loan and $65 million 18-month commitment period delayed-draw first-lien term loan emerged at Libor plus 450 bps with a 0.75% Libor floor and an original issue discount of 99.5, a market source said.

The funded and delayed-draw term loans are being sold as a strip.

The term loan has 101 soft call protection for six months and the delayed-draw ticking fee is half the margin from days 46 to 90 and the full margin thereafter.

The company’s $455 million of credit facilities (B3) also include a $15 million five-year revolver.

Commitments are due at 4 p.m. ET on March 11, the source added.

Jefferies LLC is leading the deal that will be used to refinance existing debt and finance near-term acquisitions.

EyeSouth is an Atlanta-based provider of practice management services to a network of affiliated ophthalmology practices, specializing in essential treatments for eye health conditions.

Cowen proposed terms

Cowen came out with talk of Libor plus 325 bps with a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months on its $300 million seven-year covenant-lite first-lien term loan B (B1/BB-) that launched with a call in the morning, according to a market source.

Commitments are due at noon ET on March 12, the source added.

Morgan Stanley Senior Funding Inc. is leading the deal, which will be used to refinance existing debt and pay related fees, expenses and original issue discount.

Cowen is a New York-based investment bank and financial services company.

Watlow launches

Watlow held its call in the morning, launching its $515 million seven-year term loan B (B2/B) at talk of Libor plus 400 bps to 425 bps with a 0.5% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, a market source remarked.

Commitments are due at noon ET on March 15, the source added.

BMO Capital Markets, BofA Securities Inc., Barclays and Citizens Bank are leading the deal that will be used to help fund the buyout of the company by Tinicum LP.

Watlow is a St. Louis-based designer and manufacturer of complete thermal systems.

Denali reveals guidance

Denali Water Solutions announced talk of Libor plus 450 bps to 475 bps with a 0.75% Libor floor, an original issue discount of 99 and 101 soft call protection for six months on its $395 million first-lien term loan that launched with a meeting during the session, a market source said.

The company’s $455 million of credit facilities (B3/B-) also include a $60 million revolver.

Commitments are due on March 17, the source added.

UBS Investment Bank, BMO Capital Markets and KeyBanc Capital Markets are leading the deal, which will be used to fund the acquisition of Organix Recycling LLC, a food waste collector and recycler, and to refinance Denali’s existing credit facility.

Denali Water Solutions, a TPG portfolio company, is a Russellville, Ark.-based specialty waste and environmental services company.

Sorenson joins calendar

Sorenson set a lender call for 1 p.m. ET on Thursday to launch a $600 million five-year senior secured first-lien term loan (B2/B+) talked at Libor plus 550 bps to 575 bps with a 0.75% Libor floor, an original issue discount of 98.5 and 101 soft call protection for six months, according to a market source.

Commitments are due at 5 p.m. ET on March 11, the source added.

Credit Suisse Securities (USA) LLC, Blackstone and KKR Capital Markets are leading the deal that will be used to refinance existing debt.

Sorenson is a Salt Lake City-based provider of end-to-end communication technology services for the deaf and hard of hearing.

Avast readies deal

Avast Software will hold an investor call at 10:30 a.m. ET on Thursday to launch an $837 million equivalent U.S. and euro seven-year term loan B (Ba1), a market source remarked.

The U.S. tranche is expected to have a minimum size of $350 million and the euro tranche is expected to have a minimum size of €300 million.

Talk on the term loans is Libor/Euribor plus 225 bps with a 0% floor, an original issue discount of 99.5 to 99.75 and 101 soft call protection for six months, the source added.

Commitments for the U.S. loan are due at noon ET on March 12 and commitments for the euro loan are due at 7 a.m. ET on March 12.

Credit Suisse is the physical lead bookrunner on the deal and Morgan Stanley is a joint lead bookrunner.

Avast, a Prague-based cybersecurity provider, will use the term loans to refinance existing debt.

Hudson River on deck

Hudson River Trading scheduled a lender call for 10 a.m. ET on Thursday to launch a $1.725 billion first-lien term loan B, according to a market source.

Goldman Sachs Bank USA, BofA Securities Inc. and JPMorgan Chase Bank are leading the deal that will be used to refinance an existing $1.225 billion term loan and add cash to the balance sheet.

Hudson River Trading is a New York-based electronic market maker and liquidity provider.

WildBrain coming soon

WildBrain set a lender call for 2 p.m. ET on Thursday to launch a $280 million seven-year first-lien term loan, a market source said.

RBC Capital Markets is leading the deal that will be used to repay an existing term loan B.

WildBrain is a Canada-based kids’ content company.

Churchill plans call

Churchill Downs scheduled a lender call for 10:30 a.m. ET on Thursday to launch a non-fungible $200 million term loan B-1 (BBB-) talked at Libor plus 200 bps to 225 bps with a 0% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, according to a market source.

Commitments are due at noon ET on March 10, the source added.

JPMorgan Chase Bank, Fifth Third Bank, PNC, U.S. Bank and Wells Fargo Securities LLC are leading the deal that will be used to repay revolver borrowings and to add cash to the balance sheet.

Churchill Downs is a Louisville, Ky.-based racing, online wagering and gaming entertainment company.

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