Citco, Delrin, Evertec term loans break for trading; Gentiva revises add-on term loan OID

By Sara Rosenberg

New York, Oct. 12 – Citco increased the size of its add-on term loan B, trimmed the spread, firmed the original issue discount at the tight end of talk, revised the call protection and switched to a non-fungible tranche from a fungible tranche, and then freed up for trading on Thursday.

Also, Delrin shifted its first-lien term loan to an all U.S. dollar structure from a U.S. and euro structure, lowered pricing, removed one margin step-down and finalized the issue price at the tight side of guidance before breaking for trading, and Evertec Inc.’s term loan B made its way into the secondary market as well.

In addition, Gentiva modified the original issue discount on its add-on term loan B, Action Holding BV (Peer Holding III BV/Peer USA LLC) released price talk on its term loan B-4 and Ciena Corp. came to market with a new term loan B for a refinancing.

Citco restructured, frees

Citco raised its add-on term loan B due April 2028 to $760 million from $410 million, cut pricing to SOFR plus 325 basis points from SOFR plus 350 bps, set the original issue discount at 99.5, the tight end of the 99 to 99.5 talk, changed the 101 soft call protection to six months from expiring this month, and shifted to non-fungible status from fungible, according to a market source.

As before, the add-on term loan has a 0.5% floor.

Recommitments were due at 11:30 a.m. ET on Thursday and the add-on term loan broke for trading in the afternoon, with levels quoted at 99 7/8 bid, par 3/8 offered, another source added.

Goldman Sachs Bank USA is the left lead on the deal. UBS Investment Bank is the administrative agent.

The add-on term loan will be used to fund a minority shareholder recapitalization and, due to the upsizing, to refinance an existing $348 million term loan A due October 2027.

The company’s existing term loan B is priced at SOFR plus 350 bps with a 0.5% floor.

Citco is an independent pure play hedge fund, private equity and real estate administrator.

Delrin reworked

Delrin moved to an all U.S. dollar $700 million seven-year first-lien term loan (B2/B+), from a $700 million equivalent U.S. and euro term loan with the U.S. piece being a minimum of $500 million, a market source remarked.

Also, pricing on the term loan was reduced to SOFR plus 425 bps from SOFR plus 450 bps, a 25 bps step-down at 3.25x first-lien net leverage was eliminated, the original issue discount firmed at 98.5, the tight end of the 98 to 98.5 talk, and some revisions were made to documentation, the source continued.

The term loan still has a 25 bps step-down at 3.5x first-lien net leverage, a 25 bps step-down upon the consummation of an initial public offering, a 0.5% floor and 101 soft call protection for six months.

The removed euro term loan tranche had been talked at Euribor plus 450 bps with a 0% floor, an original issue discount of 98 to 98.5 and 101 soft call protection for six months.

Delrin hits secondary

Recommitments for Delrin’s term loan were due at 3 p.m. ET on Thursday, and the debt freed to trade later in the day, with levels quoted at 98¾ bid, 99¾ offered, another source added.

Goldman Sachs Bank USA, RBC Capital Markets, BMO Capital Markets, UBS Investment Bank, KeyBanc Capital Markets and KKR Capital Markets are leading the deal that will be used to help fund the acquisition of an 80.1% ownership interest in the company by The Jordan Co. from DuPont in a transaction valuing the business at $1.8 billion.

At close, DuPont will receive pre-tax cash proceeds of about $1.25 billion, subject to customary transaction adjustments, a note receivable of $350 million, and will own a 19.9% non-controlling common equity interest in Delrin.

Closing is expected around year-end, subject to customary conditions and regulatory approval.

Delrin is a producer of acetal homopolymer, a high-end engineering thermoplastic.

Evertec breaks

Evertec’s $600 million seven-year covenant-lite term loan B (Ba3/BB-) began trading in the morning, with levels quoted at 99 3/8 bid, 99 7/8 offered, a market source said.

Pricing on the term loan B is SOFR plus 350 bps with a 0.5% floor and it was sold at an original issue discount of 98.5. The debt has 101 soft call protection for six months.

The company is also getting a $60 million incremental term loan A.

During syndication, pricing on the term loan B was reduced from talk in the range of SOFR plus 375 bps to 400 bps and the incremental term loan A was added to the transaction.

Truist Securities Inc. is the left lead on the deal.

The term loan B will be used to fund the acquisition of Sinqia for R$27.19 per share, increased by a customary daily “ticking fee” of up to R$1.00 per share depending on the timing of the closing, and the term loan A will be used to put cash on the balance sheet for general corporate purposes. Consideration for Sinqia, a Brazil-based provider of technology for financial institutions, will be in the form of 90% cash and 10% Evertec shares.

Evertec is a Puerto Rico-based full-service transaction processing company.

Gentiva tweaked

Gentiva adjusted the original issue discount on its fungible $500 million add-on term loan B due February 2028 to 98 from talk in the range of 97 to 97.5, according to a market source.

Like the existing term loan, the add-on term loan is priced at SOFR plus 525 bps with a 0.5% floor.

Commitments continue to be due at 10 a.m. ET on Friday, the source added.

Goldman Sachs Bank USA, Deutsche Bank Securities Inc., UBS Investment Bank, BNP Paribas Securities Corp., Citizens Bank, Truist Securities, Wells Fargo Securities LLC, Mizuho and Natixis are leading the deal that will be used to fund the acquisition of Heartland hospice and home care agencies/locations from ProMedica.

CD&R is the sponsor.

Gentiva is a provider of hospice, palliative, and personal care services.

Action guidance

Action Holding held its lender call on Thursday morning and announced talk on its $1 billion seven-year term loan B-4 (Ba2/BB) at SOFR plus 350 bps with a 0% floor and an original issue discount of 99, a market source remarked.

The term loan has 101 soft call protection for six months.

Commitments are due at noon ET on Oct. 19, the source added.

Bank of America, Barclays and Deutsche Bank are the left lead global coordinators and lead arrangers, with Bank of America the primary left lead. BNP Paribas, Citigroup, Rabobank and Goldman Sachs are global coordinators and lead arrangers. ABN Amro, Credit Agricole, Natixis, RBC and SMBC are lead arrangers. Rabobank is the administrative agent.

The term loan B-4 will be used with some surplus cash on the balance sheet to fund a financing-related distribution and/or share buyback, to pay transaction fees and expenses, and to put cash on the balance sheet of the group and/or for general corporate purposes.

Action is a non-food discount retailer in Europe.

Ciena holds call

Ciena held a lender call at 2:30 p.m. ET to launch a $670 million seven-year term loan B (Baa3/BB+) talked at SOFR plus 200 bps to 225 bps with a 0% floor, an original issue discount of 99.5 and 101 soft call protection for six months, market sources said.

Commitments are due at noon ET on Oct. 19, sources added.

BofA Securities Inc. is the left lead on the deal that will be used to refinance the company’s existing term loan B due 2025.

Ciena is a Hanover, Md.-based networking systems, services and software company.

Loan indices rise

In other news, IHS Markit’s iBoxx loan indices were stronger on Wednesday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.09% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.2%.

Month to date, the MiLLi is down 0.02% and year to date it is up 9.8%, and the LLLi is down 0.1% month to date and up 9.06% year to date.

Average secondary market bids in the U.S. on Wednesday were 92.98, up 0.05% from the previous day and up 1.21% year to date.

According to the IHS Markit data, some of the top advancers on Wednesday were AMR/AAdvantage’s March 2021 term loan at 102.29, up from 98.88, Weight Watchers; April 2021 covenant-lite term loan at 76.33, up from 74.06, and Essential Power’s (Nautilus Power) April 2023 term loan B at 77.67, up from 75.5.

Some top decliners on Wednesday were U.S. Renal Care’s July 2023 term loan at 62.5, down from 66.08, Allen Media’s August 2021 covenant-lite term loan at 86.17, down from 87.94, and Research Now/Survey Sampling’s December 2017 second-lien covenant-lite term loan B at 45.96, down from 46.88.

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