DaVita, Calpine, SnapAV update deals; Clear Channel, Albertsons, CEC, Shields disclose talk

By Sara Rosenberg

New York, Aug. 1 – In the primary market on Thursday, DaVita Inc. lowered pricing on its term loan B and set the issue price at the tight end of guidance, and Calpine Corp. increased the size of its term loan B-10 and modified the original issue discount.

Also, SnapAV changed the structure of its incremental first-lien term loan, trimmed the spread, widened the issue price, extended the call protection and made lender-friendly revisions to documentation.

Additionally, Clear Channel Outdoor Holdings Inc., Albertsons Cos. Inc., CEC Entertainment Inc. and Shields Health Solutions Holdings LLC released price talk with launch, and US Ecology Inc. joined the near-term primary calendar.

DaVita flexes

DaVita cut pricing on its $2.5 billion seven-year term loan B to Libor plus 225 basis points from Libor plus 250 bps and set the original issue discount at 99.5, the tight end of the 99 to 99.5 talk, a market source remarked.

The term loan B still has a 0% Libor floor and 101 soft call protection for six months.

Commitments for the term loan B continue to be due at 3 p.m. ET on Wednesday, the source added.

The company’s $5.25 billion of senior secured credit facilities (Ba1/BBB-) also include a $1 billion five-year revolver and a $1.75 billion five-year term loan A with a delayed-draw feature.

Based on an SC TO-I filed with the Securities and Exchange Commission, initial pricing on the revolver and term loan A is expected to be Libor plus 150 bps.

Wells Fargo Securities LLC, Credit Agricole, J.P. Morgan Securities LLC, MUFG, BofA Securities, Inc., Barclays, Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc. and SunTrust Robinson Humphrey Inc. are leading the deal that will be used to repay revolver and term loan borrowings, to redeem the $1.25 billion 5¾% senior notes due 2022, to buy back common stock, to pay fees and expenses, and for general corporate purposes.

DaVita is a Denver-based provider of kidney dialysis services to patients with chronic kidney failure.

Calpine sets changes

Calpine raised its seven-year covenant-lite first-lien term loan B-10 (Ba2/BB) to $750 million from $550 million and adjusted the original issue discount to 99.5 from 99, according to a market source.

As before, the term loan B-10 is priced at Libor plus 250 bps with a 0% Libor floor and has 101 soft call protection for six months.

Commitments remained due at 5 p.m. ET on Thursday, the source said.

Credit Suisse Securities (USA) LLC is the left lead on the deal that will be used to refinance an existing term loan B-7 and funds from the upsizing will be used to repay project financing.

Calpine is a Houston-based generator of electricity from natural gas and geothermal resources.

SnapAV reworks loan

SnapAV switched its $390 million incremental first-lien term loan to fungible from non-fungible, trimmed pricing to Libor plus 450 bps from Libor plus 500, revised the original issue discount to 95 from 99 and extended the 101 soft call protection to one year from six months, a market source said.

Due to these changes, pricing on the existing first-lien term loan due Aug. 4, 2024 will now be increased to Libor plus 450 bps from Libor plus 400 bps to match the incremental term loan pricing, the source continued.

The incremental term loan still has a 0% Libor floor.

Regarding documentation, the MFN is 50 bps with no sunset and the incremental ratio carve-out was removed, the incremental debt grower prong was limited to 75% of EBITDA, the first-lien leverage ratio was set at 4.95x for the unlimited incremental ratio basket, the available amount basket usage was limited to 5.25x leverage, and unlimited investments were set at 4.25x leverage.

Also, the EBITDA cap is 30% of pro forma addbacks, provided that cap shall not apply to M&A or adjustments contemplated on or prior to incremental closing date, asset-sale step-downs were removed, and the ability to release material guarantor following a de minimis transfer of that guarantor’s equity outside of the loan party was eliminated.

SnapAV buying Control4

SnapAV’s incremental term loan is being used to help fund the now completed acquisition of Control4 Corp. for $23.91 per share in cash, representing an aggregate value of about $680 million.

Commitments are due at 5 p.m. ET on Monday.

UBS Investment Bank, SunTrust Robinson Humphrey Inc. and BMO Capital Markets Corp. are leading the debt.

Hellman & Friedman, SnapAV’s majority shareholder since 2017, is investing about $247 million of additional new cash equity as part of the transaction and is the majority shareholder of the combined company.

SnapAV is a Charlotte, N.C.-based manufacturer and primary source of A/V, surveillance, networking and remote management products for professional integrators. Control4 is a Salt Lake City-based provider of smart home solutions.

Clear Channel guidance

In more primary happenings, Clear Channel Outdoor held its bank meeting on Thursday and released talk on its $2 billion seven-year covenant-lite first-lien term loan B at Libor plus 350 bps to 375 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source remarked.

The company’s $2.2 billion of credit facilities also include a $200 million revolver.

Commitments are due at noon ET on Aug. 13, the source added.

Morgan Stanley Senior Funding Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are leading the deal that will be used to refinance existing debt and pay related fees and expenses. Deutsche is the administrative agent.

Clear Channel Outdoor is a New York-based outdoor advertising company.

Albertsons holds call

Albertsons surfaced in the morning with plans to hold a lender call at 11:30 a.m. ET to launch a $1.7 billion seven-year covenant-lite first-lien term loan B-8 talked at Libor plus 300 bps with a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, according to market sources.

The term loan B-8 was then downsized later in the day to $1.6 billion as the company upsized its senior notes offering to $750 million from $500 million.

Commitments are due at 5 p.m. ET on Tuesday, sources said.

Credit Suisse Securities (USA) LLC is the left lead on the loan (BB) that will be used with the notes and cash on hand to refinance around $3.2 billion of existing term loan debt, increased from about $3 billion with the notes upsizing.

Albertsons is a Boise, Idaho-based food and drug retailer.

CEC releases talk

CEC Entertainment held its lender call in the afternoon and, a few hours before it began, price talk on its $760 million seven-year covenant-lite first-lien term loan (B2/B-) was announced at Libor plus 550 bps to 575 bps with a 0% Libor floor and an original issue discount of 99, a market source remarked.

The term loan has 101 soft call protection for six months and a springing maturity.

Commitments are due at 5 p.m. ET on Aug. 8.

Credit Suisse Securities (USA) LLC is the left lead on the deal that will be used to refinance an existing term loan, to fund cash to the balance sheet for general corporate purposes and to pay related fees and expenses.

CEC is an Irving, Tex.-based operator of family dining and entertainment stores through Chuck E. Cheese and Peter Piper Pizza brands.

Shields proposed terms

Shields Health Solutions disclosed talk of Libor plus 475 bps to 500 bps with a 0% Libor floor and an original issue discount of 99 on its $200 million seven-year covenant-lite first-lien term loan shortly before its morning bank meeting began, according to a market source.

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

The company’s $215 million of credit facilities (B3/B-) also include a $15 million revolver.

Commitments are due on Aug. 15.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to help fund the buyout of the company by Welsh, Carson, Anderson & Stowe. Walgreen Co., a drugstore chain, is also making an equity investment in Shields Health.

Closing is expected in the third quarter, subject to customary regulatory reviews.

Shields Health is a Stoughton, Mass.-based specialty pharmacy integrator and care provider, partnering with hospitals on specialty pharmacy creation, growth and management.

US Ecology on deck

US Ecology set a bank meeting for 10 a.m. ET in New York on Tuesday to launch a $400 million seven-year covenant-lite term loan B talked with 101 soft call protection for six months, a market source said.

Commitments are due at 3 p.m. ET on Aug. 15, the source added.

Wells Fargo Securities LLC is the left lead on the deal, which will be used to refinance NRC Group Holdings Corp.’s existing debt and pay transaction related fees in connection with US Ecology’s all-stock acquisition of NRC Group.

US Ecology is a Boise, Idaho-based provider of environmental services to commercial and government entities. NRC Group is a Great River, N.Y.-based provider of environmental, compliance and waste management services.

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