AZZ, Cambrex, Restoration Hardware loans free to trade; Syniverse changes emerge

By Sara Rosenberg

New York, May 6 – AZZ Inc. lifted pricing on its term loan B, removed a step-down, changed CSA, revised the issue price and adjusted certain documentation items, and then the debt made its way into the secondary market on Friday.

Also, Cambrex Corp. reduced the size of its U.S. incremental first-lien term loan and added a euro incremental first-lien term loan to the structure before freeing up for trading, and Restoration Hardware Inc.’s incremental term loan B-2 broke as well.

Furthermore, Syniverse Holdings LLC widened the spread and original issue discount on its term loan B and made some changes to documentation.

AZZ reworked

AZZ increased pricing on its $1.3 billion seven-year covenant-lite term loan B to SOFR plus 425 basis points from SOFR plus 375 bps, eliminated the 25 bps step-down at 0.5x inside closing date first-lien net leverage, and changed CSA to 10 bps one-month rate, 15 bps three-month rate and 25 bps six-month rate from 10 bps for all tenors, according to a market source.

Additionally, the original issue discount talk on the term loan was revised to a range of 96.5 to 97 from 98, and then set at 96.5, the source said.

The company also made changes to MFN, the inside maturity basket, accordion, general liens, reinvestment period, excess cash flow sweep, general restricted payments basket and the unlimited restricted payments ratio, and asset sale step-downs were removed.

The term loan still has a 0.5% floor and 101 soft call protection for six months.

Along with the term loan, the company’s $1.7 billion of senior secured credit facilities (Ba3/B) include a $400 million revolver.

AZZ hits secondary

Recommitments for AZZ’s term loan B were due at 11 a.m. ET on Friday and the debt began trading later in the day, with levels quoted at 96 5/8 bid, 97 1/8 offered, another source added.

Citigroup Global Markets Inc., Wells Fargo Securities LLC, Barclays, CIBC and US Bank are leading the deal that will be used to help fund the acquisition of Sequa Corp.’s Precoat Metals business division for $1.28 billion and to refinance existing debt.

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

AZZ is a Fort Worth-based provider of galvanizing and metal coating solutions, welding solutions, specialty electrical equipment and highly engineered services for maintaining and building critical infrastructure. Precoat Metals is a St. Louis-based provider of metal coil coating solutions.

Cambrex tweaked, frees

Cambrex scaled back its fungible U.S. incremental first-lien term loan due December 2026 (B2/B) to $50 million from $75 million and added a €25 million incremental first-lien term loan due December 2026 (B2/B), a market source said.

The U.S. incremental term loan is still priced at SOFR+10 bps CSA plus 350 bps with a 0.75% floor and an original issue discount of 99.03, and pricing on the euro incremental term loan is Euribor plus 400 bps with a 0% floor and a discount of 99.03.

During the session, the U.S. incremental term loan broke for trading, with levels quoted at 99 bid, 99½ offered, a trader added.

RBC Capital Markets is leading the deal that will be used to fund a small acquisition, to repay revolver borrowings and to pay related fees and expenses.

With this transaction, pricing on the company’s existing roughly $917 million first-lien term loan will transition to SOFR+10 bps CSA plus 350 bps with a 0.75% floor from Libor plus 350 bps with a 0.75% Libor floor.

Cambrex is an East Rutherford, N.J.-based small molecule company providing drug substance, drug product and analytical services.

Restoration breaks

Restoration Hardware’s non-fungible $500 million incremental term loan B-2 also freed to trade, with levels quoted at 95 bid, 96 offered, according to a market source.

Pricing on the term loan B-2 is SOFR+10 bps CSA plus 325 bps with a 0.5% floor and it was sold at an original issue discount of 95. The debt has 101 soft call protection for one year.

During syndication, the term loan B-2 was downsized from $1 billion, the discount widened from 97.5 and the call protection was extended from six months.

BofA Securities Inc. is the left lead on the deal that will be used for general corporate purposes.

Restoration Hardware is a Corte Madera, Calif.-based upscale home furnishings company.

Syniverse revised

In more happenings, Syniverse lifted pricing on its $1.025 billion seven-year term loan B (B3/B-) to SOFR plus 700 bps from talk in the range of SOFR plus 500 bps to 525 bps and adjusted the original issue discount to 96 from 97, a market source remarked.

Also, the preferred dividend restricted payment carve-out was changed to up to 4.85x first-lien net leverage from up to 6x total net leverage, an available amount leverage governor was added of must be able to incur $1 of ratio debt, and the free and clear was updated to the greater of $165 million and 75% of EBITDA from the greater of $242 million and 100% of EBITDA, the source continued.

As before, the term loan has a 0.5% floor, no CSA, 101 soft call protection for six months, and an ESG step-down of 7.5 bps subject to outlined KPI that steps back up by 7.5 bps if the company fails to meet the KPI metric.

Commitments were scheduled to be due at 2 p.m. ET on Friday, the source added.

Syniverse lead banks

Barclays, Goldman Sachs Bank USA, Mizuho, BofA Securities Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., BNP Paribas Securities Corp. and Societe Generale are leading Syniverse’s term loan B.

The loan will be used with $340 million of preferred equity, upsized from $315 million, and an equity investment from Twilio Inc. to refinance the company’s existing capital structure.

The Carlyle Group will maintain its majority interest in Syniverse.

Closing is expected in Syniverse’s fiscal second-quarter 2022.

Syniverse is a Tampa, Fla.-based provider of technology and business services for the telecommunications industry.

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