Reynolds, New Breed, SBA break; Tomkins dips on asset sale; Genesis, Sheridan update deals

By Sara Rosenberg

New York, Sept. 21 - Reynolds Group Holdings Ltd.'s U.S. term loan made its way into the secondary market on Friday at par plus levels, and New Breed Logistics Inc. and SBA Communications Corp. freed up as well.

Also in trading, Tomkins LLC (Pinafore Holdings BV) saw its term loan B soften a little following news that the company has reached an agreement to sell its air distribution business.

Moving to the primary market, Genesis HealthCare LLC firmed the original issue discount on its term loan at the wide side of revised guidance, and Sheridan Production Partners set the coupon on its term loan at the tight end of talk and added a new shorter-dated tranche to the mix.

In addition, CAMP International Holding Co. released guidance on its repricing deal, Pep Boys - Manny, Moe & Jack's term loan B is already strongly oversubscribed, and Centerplate Inc., Savers Inc. and Southern Graphics Inc. (SGS International Inc.) announced new deal plans.

Reynolds tops OID

Reynolds Group's $2,235,000,000 U.S. term loan due September 2018 began trading on Friday morning, with one trader quoting the debt at par ¼ bid, par ½ offered and a second trader quoting it a touch wider at par ¼ bid, par ¾ offered.

Pricing on the U.S. loan is Libor plus 375 basis points with a step-down to Libor plus 350 bps at less than 5.5 times net leverage. There is a 1% Libor floor as well as 101 repricing protection for one year, and the debt was sold at par.

The company's roughly $2.6 billion of debt (B1/B+) also includes a €300 million term loan due September 2018 that is priced at Euribor plus 400 bps with a step-down to Euribor plus 375 bps at less than 5.5 times net leverage. This tranche also has a 1% floor, was sold at par and includes 101 repricing protection for one year.

During syndication, the U.S. term loan was downsized from $2,775,000,000 and pricing came in from Libor plus 425 bps, while the euro term loan was upsized from €250 million and the coupon was lowered from Euribor plus 425 bps.

Reynolds repaying debt

Proceeds from Reynolds' new term loans, which are being led by Credit Suisse Securities (USA) LLC, will be used to refinance existing U.S. and euro term loans.

More funds for the debt paydown will come from $1.55 billion of proceeds raised from a $3.25 billion senior secured notes offering. Of the remaining notes proceeds, about $1.2 billion will refinance 7¾% secured notes and about $500 million will add cash to the balance sheet.

The bond deal had been upsized from $1 billion, which is why the total amount of new term loan debt being obtained was reduced to by about $500 million from roughly $3.1 billion.

Reynolds Group is an Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products.

New Breed frees up

New Breed Logistics was another deal to emerge in the secondary market, with levels on the $300 million seven-year term loan B quoted at 99½ bid, par offered on the break and then it moved up to 99¾ bid, par ¼ offered, according to a market source.

Pricing on the B loan is Libor plus 475 bps, after firming at the low end of the Libor plus 475 bps to 500 bps guidance, the source said. There is a 1.25% Libor floor and 101 soft call protection for one year, and the debt was sold at a discount of 99.

Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch, RBC Capital Markets LLC and Wells Fargo Securities LLC are leading the $350 million senior secured credit facility (B2/B), which also includes a $50 million five-year revolver.

New Breed, a High Point, N.C.-based third-party logistics services provider, will use the credit facility proceeds to refinance existing debt and fund a sponsor dividend.

SBA hits secondary

Also breaking for trading was SBA Communications' $300 million incremental term loan B (Ba2/BB), with levels quoted at par ½ bid, 101 offered, according to a trader.

Pricing on the loan is Libor plus 275 bps with a 1% Libor floor, and it was sold at an original issue discount of 993/4, after recently tightening from 99. There is 101 soft call protection for one year.

Citigroup Global Markets Inc., Barclays and J.P. Morgan Securities LLC are leading the deal that will help fund the purchase of 3,252 tower sites from TowerCo for $1.2 billion in cash and 4.6 million shares of class A common stock, implying a total transaction value of $1.45 billion.

SBA, a Boca Raton, Fla.-based provider and owner and operator of wireless communications infrastructure, expects to close on the transaction in the fourth quarter, subject to customary conditions.

SBA sells notes

Other funds for SBA's acquisition of the TowerCo assets will come from senior notes that launched on Thursday morning and priced that afternoon at par to yield 5 5/8%. The bonds were upsized to $500 million from $300 million, with the extra proceeds earmarked for general corporate purposes.

Back in June, the company said that it got a commitment for a $900 million two-year bridge loan for the transaction with pricing of Libor plus 350 bps.

The company also disclosed that the refinancing plan for the bridge loan would encompass multiple debt markets and provide flexibility to move opportunistically depending on conditions in the markets the company opts to pursue.

Pro forma net debt leverage is anticipated to be in the range of 7.8 times to 8 times at closing. It is expected that leverage will be brought down to the target area of 7 times to 7.5 times in under a year without the issuance of any more equity to delever.

Tomkins weakens

In more trading happenings, Tomkins' term loan B slipped to par 3/8 bid, par 7/8 offered, from par ½ bid, 101 offered, as the company announced the sale of its air distribution division to Canada Pension Plan Investment Board, according to a trader.

Some sources theorized that the loan is moving closer to par because investors are expecting a paydown with the proceeds from the asset sale.

The aggregate consideration payable in the transaction will be about $1.1 billion in cash, subject to certain customary adjustments, and closing is expect to occur in the fourth quarter.

Tomkins, a London-based engineering and manufacturing group, is jointly owned by Onex Corp. and Canada Pension Plan Investment Board.

With this acquisition, Canada Pension Plan Investment Board will own a significant majority interest in the air distribution division, including the portion that it does not currently own indirectly through Tomkins.

The air distribution division manufactures air distribution and ventilation products, and air movement and control products.

Genesis sets OID

Over in the primary, Genesis HealthCare firmed the discount price on its $325 million term loan (B2/B) at 94, the wide end of adjusted talk of 94 to 95, according to a market source. Initial discount talk at launch had been 98.

Pricing on the loan is Libor plus 850 bps with a 1.5% Libor floor, and the debt is non-callable for one year, then there is hard call protection of 102 in year two and 101 in year three.

The loan includes a ticking fee of 150 bps from allocation through Oct. 31, increasing to 250 bps from Nov. 1 through Nov. 30 and to the full spread from Dec. 1 and thereafter.

Earlier in the syndication process, when the original issue discount talk was first revised, pricing on the term loan was increased from Libor plus 650 bps, the call premium was sweetened from just 101 soft call protection for one year, the maturity was shortened to five years from six years, and amortization was beefed up to 5% per annum from 1%.

Now that pricing is finalized, the goal is to allocate the transaction early in the week of Sept. 24, the source continued.

Genesis getting revolver

Genesis HealthCare's $700 million senior secured facility also provides for a $375 million five-year ABL revolver that has pricing ranging from Libor plus 275 bps to 325 bps with an unused fee of 37.5 bps to 50 bps, based on usage. This tranche was downsized from $425 million when all the pricing changes were made to the term loan.

Barclays and GE Capital Markets Inc. are leading the deal, with Barclays left lead on the term loan and GE left on the revolver.

Proceeds will help fund the purchase of Sun Healthcare Group Inc., an Irvine, Calif.-based health care services company, for $8.50 per share of common stock in cash, resulting in a transaction value of about $275 million net of cash and debt acquired.

Closing is expected in October/November, at which time Genesis, a Kennett Square, Pa.-based skilled nursing care provider, will have total debt to annualized pro forma adjusted EBITDA of 2.4 times, and adjusted debt to annualized pro forma adjusted EBITDAR of 4.8 times.

Sheridan tweaks deal

Sheridan Production Partners nailed down pricing on its $800 million seven-year term loan at Libor plus 400 bps, the low end of the Libor plus 400 bps to 425 bps guidance, while leaving the 1.25% Libor floor, original issue discount of 99 and 101 soft call protection for one year unchanged, according to a market source.

Furthermore, a new $100 million six-year term loan was added to the deal with pricing of Libor plus 350 bps with a 1.25% Libor floor and an original issue discount of 99, the source said, adding that this loan has 101 soft call protection for one year too.

UBS Securities LLC, Bank of America Merrill Lynch and Citigroup Global Markets Inc. are leading the oversubscribed deal that will be used to refinance existing debt.

Sheridan Production Partners is a Houston-based oil and gas production company.

CAMP discloses talk

CAMP International held a conference call on Friday morning to launch its $255 million covenant-light first-lien term loan, at which time talk was announced at Libor plus 400 bps to 425 bps with a 1.25% Libor floor, a par offer price and 101 soft call protection for one year, according to a market source.

Proceeds will be used to reprice a $255 million term loan from Libor plus 525 bps with a 1.25% Libor floor, and current lenders are getting repaid at 101 as a result of an existing call premium.

Commitments for the repricing are due on Sept. 28, the source added.

Deutsche Bank Securities Inc. is leading the deal.

CAMP is a Ronkonkoma, N.Y.-based provider of maintenance tracking for business aviation.

Pep Boys nets interest

In other news, Pep Boys - Manny, Moe & Jack's $200 million term loan B (Ba2/BB-) was already well oversubscribed ahead of the Friday conference call that was held to officially launch the transaction, and investors still have until Thursday to place their orders, according to a market source.

The loan launched in line with previously outlined talk of Libor plus 400 bps with a 1.25% Libor floor and an original issue discount of 99, for an all-in yield of 5.5%. There is 101 soft call protection for one year.

Wells Fargo Securities LLC and Bank of America Merrill Lynch are the lead banks on the deal that will be used to refinance an existing term loan and senior subordinated notes.

Pep Boys is a Philadelphia-based automotive aftermarket chain.

Centerplate readies loan

Centerplate set a bank meeting for Tuesday to launch a $342 million credit facility that consists of a $75 million revolver and a $267 million term loan, according to a market source.

GE Capital Markets, PNC Capital Markets LLC and Rabo Securities USA Inc. are leading the deal, which will help fund the acquisition of the company by Olympus Partners from Kohlberg & Co. LLC.

Centerplate is a Stamford, Conn.-based provider of food and beverage concessions, high-end catering, and merchandise services in sports facilities, convention centers and other entertainment facilities.

Savers coming soon

Savers scheduled a conference call for Monday to launch a refinancing of its $655 million seven-year term loan that is priced at Libor plus 500 bps with a 1.25% Libor floor, according to a market source.

Goldman Sachs & Co. is the lead bank on the deal.

Savers is a Bellevue, Wash.-based thrift store chain.

Southern Graphics sets launch

Southern Graphics will be holding a bank meeting in New York on Tuesday to launch a $450 million credit facility that is being led by Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Bank of America Merrill Lynch and Goldman Sachs & Co., according to a market source.

The facility consists of a $75 million five-year revolver and a $375 million seven-year first-lien covenant-light term loan, the source said.

Proceeds will be used to help fund the $813 million purchase of the company by Onex Corp. from Court Square Capital Partners.

Closing is expected in the fourth quarter, subject to customary regulatory approvals.

Southern Graphics is a Louisville, Ky.-based provider of design-to-print graphics services to the consumer products packaging industry.

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