Tony’s+Cardenas, Cornerstone Building free to trade; Kindred at Home releases price talk

By Sara Rosenberg

New York, July 20 – Tony’s Fresh Market+Cardenas Markets (Cardenas Merger Sub LLC) trimmed the spread on its first-lien term loan and changed the original issue discount, and Cornerstone Building Brands Inc. firmed the issue price on its first-lien term loan at the midpoint of revised guidance, and then both of these deals broke for trading on Wednesday.

In more happenings, Kindred At Home Hospice came to market with first-and second-lien term loans, ETC Group (EOS Finco) joined this week’s new issue calendar, and STG Logistics disclosed the commitment deadline for its incremental first-lien term loan.

Tony’s flexes

Tony’s Fresh Market+Cardenas Markets lowered pricing on its $435 million seven-year first-lien term loan to SOFR plus 675 basis points from SOFR plus 700 bps in the late morning, not too long after announcing in the early morning that the original issue discount was modified to 94 from 92, a market source remarked.

As before, the term loan has 10 bps CSA, a 0.75% floor and 101 hard call protection for one year.

The company’s $510 million of credit facilities (B2/B) also include a $75 million revolver.

Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, Rabobank and Natixis are leading the deal.

Tony’s hits secondary

Recommitments for Tony’s Fresh Market+Cardenas Markets’ term loan were due at noon ET on Wednesday, accelerated from an original deadline of 5 p.m. ET on Wednesday, and the debt began trading later in the day, with levels quoted at 94˝ bid, 95˝ offered, another source added.

The credit facilities will be used to help fund the acquisition of Cardenas Markets by Apollo from KKR and merger of Cardenas with Tony’s Fresh Market, a current Apollo portfolio company.

Closing is expected this quarter, subject to customary conditions.

Cardenas is an Ontario, Calif.-based grocery retailer focused on serving the Hispanic community. Tony’s is a Chicago-based grocery chain.

Cornerstone updated

Cornerstone Building finalized the original issue discount on its $300 million covenant-lite first-lien term loan (B2/B) due Aug. 1, 2028 at 90.5, the midpoint of revised talk of 90 to 91 and wider than initial talk of 93, a market source said.

Pricing on the term loan remained at SOFR plus 562.5 bps with a 0.5% floor, and the debt is non-callable for two years, then at 106.563 in year three and at 103.281 in year four.

Previously in syndication, the term loan was downsized from $410 million, the available amount starter restricted payment basket was removed, the ratio for dividends was tightened to 5x from 5.25x consolidated total leverage, the non-redemption period on the HoldCo PIK notes was extended to 24 months from 18 months, and the secured net leverage ratio for pari secured incurrence was reduced to 4x (except for acquisitions) from 4.5x with a step-up at 24 months to 4.5x.

Cornerstone breaks

In the afternoon, Cornerstone’s term loan made its way into the secondary market, with levels quoted at 90˝ bid, 91˝ offered, another source added.

Deutsche Bank Securities Inc., UBS Investment Bank, Barclays, BNP Paribas Securities Corp., RBC Capital Markets, Societe Generale, Goldman Sachs Bank USA, Natixis and Jefferies LLC are leading the deal. Deutsche Bank and UBS are the co-left leads.

The term loan will be used with $710 million of senior secured notes, upsized from $600 million upon the term loan downsizing, and $464 million of PIK HoldCo debt to fund the acquisition of 51% of shares outstanding in the company by Clayton, Dubilier & Rice, who currently owns about 49% of the company. Cornerstone shareholders will receive $24.65 in cash per share and the transaction has an enterprise value of about $5.8 billion.

Cornerstone is a Cary, N.C.-based manufacturer of exterior building products.

Kindred holds call

In other news, Kindred At Home Hospice held a lender call at 2 p.m. ET on Wednesday to launch a $1.2 billion 5˝-year first-lien term loan B (B) and a $450 million six-year second-lien term loan (CCC+), according to a market source.

The first-lien term loan is talked at SOFR plus 525 bps with a 0.5% floor, an original issue discount of 92 to 93 and 101 soft call protection for six months, and the second-lien term loan is talked at SOFR plus 825 bps with a 0.5% floor, a discount of 91 to 92 and hard call protection of 102 in year one and 101 in year two, the source said.

The company is also getting a $400 million five-year term loan A (B).

Commitments are due at noon ET on Aug. 2, the source added.

Kindred lead banks

Goldman Sachs Bank USA, Barclays, Deutsche Bank Securities Inc., UBS Investment Bank, BNP Paribas Securities Corp., Citizens, Mizuho, RBC Capital Markets, Truist and Wells Fargo Securities LLC are leading Kindred At Home Hospice’s loans, with Goldman left on the first-lien and Barclays left on the second-lien.

The new debt will be used to help fund the acquisition of a 60% interest in the company by Clayton, Dubilier & Rice from Humana Inc. for about $2.8 billion. Humana will retain a 40% stake in the company.

Closing is this quarter, subject to customary state and federal regulatory approvals.

Kindred At Home Hospice is a provider of home-based personal care and hospice services.

ETC readies loan

ETC Group emerged with plans to hold a lender call at 10 a.m. ET on Thursday to launch a €972.4 million equivalent U.S. senior secured seven-year first-lien term loan talked at SOFR plus 575 bps to 600 bps with a 0.5% floor, an original issue discount of 92 and 101 soft call protection for six months, a market source remarked.

Commitments are due at 5 p.m. ET on Aug. 3, the source added.

Credit Suisse Securities (USA) LLC, Barclays, BNP Paribas Securities Corp., Bank of Ireland, Credit Agricole, Mizuho, MUFG and Standard Chartered are leading the deal that will be used to help fund the acquisition of a majority interest in the company by Cinven from Carlyle and to pay related fees and expenses. Carlyle will hold a significant minority stake in ETC.

ETC is a France-based designer, procurer and distributor of materials, tools and equipment used by the telecom industry.

STG deadline

STG Logistics set a July 26 commitment deadline for its $45 million incremental first-lien term loan, a market source said.

Price talk on the incremental term loan is not yet available.

Antares Capital is the lead on the deal that launched with a call on Tuesday afternoon.

STG is a Bensenville, Ill.-based provider of facilities-based containerized logistics services.

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