Equitrans frees to trade; Cambium Learning, Knowlton Development updates surface

By Sara Rosenberg

New York, Dec. 13 – Equitrans Midstream Corp. lifted the spread on its term loan B, modified the original issue discount and sweetened the call premium, and then the debt made its way into the secondary market on Thursday.

In more happenings, Cambium Learning Group Inc. adjusted the issue prices on its first-and second-lien term loans, and Knowlton Development Corp. widened the original issue discount on its term loan and extended the call protection.

Equitrans sets changes

Equitrans Midstream increased pricing on its $600 million five-year senior secured term loan B (Ba3/BB/BB) to Libor plus 450 basis points from talk in the range of Libor plus 400 bps to 425 bps, revised the original issue discount to 97 from 99 and extended the 101 soft call protection to one year from six months, according to a market source.

In addition, the incremental was reduced to $150 million from $200 million, less any outstanding revolver commitments, the MFN sunset was removed, and the excess cash flow sweep was modified to 0%, stepping up to 25% if total leverage is 1.5 times and 50% if total leverage is 2.75 times, from 0%, stepping up to 25% if total leverage is 1.75 times and 50% if total leverage is 3 times, the source said.

As before, the term loan B has a 0% Libor floor.

On Monday, the term loan B was downsized from $650 million in anticipation of an amendment to the company’s existing revolver.

Equitrans starts trading

Recommitments for Equitrans’ term loan B were due at 2 p.m. ET on Thursday, and later in the day the debt broke for trading at 97½ bid, 98½ offered, another source added.

Goldman Sachs Bank USA, Barclays, Citigroup Global Markets Inc. and Guggenheim are leading the deal.

The new loan will be used to fund the acquisition of outstanding public equity interests in EQGP Holdings LP for $20.00 per unit in cash and for general corporate purposes.

Closing is expected on or about Dec. 31.

Equitrans is a provider of midstream services in the Appalachian Basin through its three primary assets: the gathering system, the transmission and storage system, and its water services assets.

Cambium revises OIDs

Cambium Learning Group widened the original issue discount on its $320 million first-lien term loan (B2/B-/BB) to 95 from 99.5 and extended the 101 soft call protection to one year from six months, a market source said.

Furthermore, the company changed the discount on its $130 million second-lien term loan (Caa2/CCC/CCC+) to 95 from 99, the source continued.

The first-lien loan is still priced at Libor plus 450 bps with no Libor floor, and the second-lien loan is still priced at Libor plus 850 bps with no Libor floor and has call protection of 102 in year one and 101 in year two.

The company’s $500 million of credit facilities also include a $50 million revolver (B2/B-/BB).

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

RBC Capital Markets, Deutsche Bank Securities Inc., Barclays and BMO Capital Markets are leading the deal that will be used to help fund the buyout of the company by Veritas Capital for $14.50 in cash per share.

Closing is expected this quarter or in the first quarter of 2019, subject to customary conditions and regulatory approvals.

Cambium is a Dallas-based educational technology solutions company.

Knowlton tweaked

Knowlton Development changed the original issue discount on its $525 million seven-year first-lien term loan (B2/B+) to 98 from 99 and pushed out the 101 soft call protection to one year from six months, a market source remarked.

Pricing on the term loan is Libor plus 425 bps with a 0% Libor floor.

Previously in syndication, pricing on the term loan was lifted from talk in the range of Libor plus 375 bps to 400 bps, and a number of revisions were made to documentation, including to MFN and various baskets.

The company’s $600 million of credit facilities also include a $75 million five-year revolver.

Allocations are expected on Friday, the source added.

UBS Investment Bank, Guggenheim and Jefferies LLC are leading the deal that will be used with equity to fund the buyout of the company by Cornell Capital.

Knowlton Development is a Quebec-based manufacturer of health and beauty-care products.

GeoStabilization allocates

In other news, GeoStabilization International allocated on Thursday its $150 million seven-year covenant-light term loan (B2/B) that is priced at Libor plus 550 bps with a 0% Libor floor and an original issue discount of 99, according to a market source.

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

UBS Investment Bank and KKR Capital Markets are leading the deal, which will be used to help fund the buyout of the company by KKR from CAI Capital Partners.

Closing is expected this year, subject to regulatory approvals and other customary conditions.

GeoStabilization is a Grand Junction, Colo.-based provider of geotechnical maintenance services for critical infrastructure.

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