Transcendia, NVA break; Doosan, Mortgage Contracting, Truck Hero, Equian, Aptean updated

By Sara Rosenberg

New York, May 11 – In the secondary market on Thursday, deals from Transcendia and National Veterinary Associates (NVA) began trading during the session, and Cengage Learning Inc.’s term loan softened after quarterly and full year earnings were announced.

Meanwhile, in the primary market, Doosan Bobcat Inc. (Clark Equipment Co.) set the spread on its term loan at the low end of guidance, added a step-down and tightened the issue price, and Mortgage Contracting Services trimmed pricing on its term loan B while also modifying the original issue discount.

Also, Truck Hero Inc. firmed spreads on its first- and second-lien term loans and revised the call premium on the second-lien tranche, Equian LLC added a delayed-draw term loan to its capital structure, Aptean Inc. upsized its add-on first-lien term loan, and KIK Custom Products Inc. moved up the commitment deadline on its add-on term loan B.

In addition, CenturyLink Inc., CHG Healthcare Services Inc., CityMD, TRC Cos. Inc. and SiteOne Landscape Supply Inc. disclosed price talk with launch, and Civitas Solutions Inc. (National Mentor Holdings Inc.), Ashland Global Holdings Inc. and SeaStar Solutions joined the near-term calendar.

Transcendia frees up

Transcendia’s $295 million seven-year first-lien term loan B (B2/B) began trading on Thursday, with the debt quoted at par bid, according to a market source.

The first-lien term loan B is priced at Libor plus 400 basis points with a 25 bps step-down subject to a first-lien net leverage test of less than 4 times and a 1% Libor floor, and was sold at an original issue discount of 99.5. The loan has 101 soft call protection for six months.

The company’s $455 million in senior secured credit facilities also include a $50 million five-year revolver (B2/B) and a $110 million pre-placed eight-year second-lien term loan.

On Wednesday, the first-lien term loan was upsized from $280 million and the second-lien term loan was downsized from $125 million.

Goldman Sachs Bank USA, Citigroup Global Markets Inc., KeyBanc Capital Markets LLC, Bank of Ireland and Societe Generale are leading the deal that is expected to close during the week of May 22 and will be used to help fund the buyout of the company by GS Merchant Bank.

Transcendia is a Franklin Park, Ill.-based provider of custom engineered specialty films materials.

National Veterinary tops par

National Veterinary Associates’ fungible $150 million add-on term loan B-2 due August 2021 also hit the secondary market, with the debt seen at par ½ bid, a trader remarked.

Pricing on the add-on loan, which is split between a $75 million funded tranche and a $75 million delayed-draw tranche, is Libor plus 350 bps with a 1% Libor floor, and it was issued at par.

Bank of America Merrill Lynch, Jefferies LLC, RBC Capital Markets and Nomura are leading the deal that will be used for general corporate purposes, including acquisitions.

National Veterinary is an Agoura Hills, Calif.-based owner of independent freestanding veterinary hospitals.

Cengage retreats

Also in trading, Cengage’s term loan fell to 94½ bid, 95½ offered from 96¾ bid, 97¼ offered with the release of disappointing fiscal fourth quarter 2017 and full year results, a trader said.

For the quarter, the company reported revenue of $288 million, down from $338 million in the prior year, a net loss of $48 million, versus a net loss of $18 million in the 2016 fiscal year fourth quarter, and adjusted EBITDA of $58 million, down from $92 million in previous year.

Regarding full fiscal year 2017, the company reported revenue of $1.46 billion, down from $1.63 billion in fiscal year 2016, a net loss of $43 million, compared to a net loss of $72 million for the previous year, and adjusted EBITDA of $474 million, down from $569 million in the prior year.

Cengage is a Boston-based educational content, technology and services company for the higher education and K-12, professional, library and workforce training markets.

Doosan tweaks loan

Switching to the primary market, Doosan Bobcat firmed pricing on its $1,345,000,000 term loan (B1/BB-) at Libor plus 275 bps, the low end of the Libor plus 275 bps to 300 bps talk, added a step-down to Libor plus 250 bps when corporate ratings are at least Ba3/BB-, and moved the original issue discount to 99.75 from 99.5, according to a market source.

As before, the term loan has a 0% Libor floor and 101 soft call protection for six months.

Recommitments were due at 5 p.m. ET on Thursday, the source said.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are leading the deal that will be used to refinance existing term loans.

Doosan is a manufacturer of compact farm and construction equipment.

Mortgage Contracting revised

Mortgage Contracting Services reduced pricing on its $390 million seven-year first-lien senior secured term loan B to Libor plus 475 bps from Libor plus 500 bps, tightened the original issue discount to 99.5 from 99 and changed the MFN to 50 bps from 75 bps, a market source said.

The term loan still has a 1% Libor floor and 101 soft call protection for six months.

The company’s $425 million in credit facilities (B2/B) also include a $35 million five-year revolver.

Allocations are expected on Friday, the source added.

Goldman Sachs Bank USA, Deutsche Bank Securities Inc. and Jefferies Finance LLC are leading the deal that will be used to help fund the buyout of the company by American Securities.

Mortgage Contracting Services is a Lewisville, Texas-based provider of critical specialized services to mortgage servicers and originators.

Truck Hero updated

Truck Hero firmed pricing on its $675 million seven-year covenant-light first-lien term loan (B1/B) at Libor plus 400 bps, the high end of the Libor plus 375 bps to 400 bps talk, and left the 1% Libor floor, original issue discount of 99 and 101 soft call protection for six months intact, a market source remarked.

Additionally, pricing on the company’s $250 million eight-year covenant-light second-lien term loan (Caa1/CCC+) was set at Libor plus 825 bps, the high end of the Libor plus 800 bps to 825 bps talk, and the call protection was changed to 103 in year one, 102 in year two and 101 in year three, from 102 in year one and 101 in year two, the source continued. This tranche still has a 1% Libor floor and a discount of 98.5.

The company’s $1,025,000,000 in senior secured credit facilities also include a $100 million five-year revolver (B1/B).

Jefferies Finance LLC, Antares Capital, Golub, Citizens Bank, Natixis and SunTrust Robinson Humphrey Inc. are leading the deal that will be used to help fund the buyout of the company by CCMP Capital Advisors LLC.

Closing is expected this quarter, subject to customary conditions.

Truck Hero is an Ann Arbor, Mich.-based provider of truck bed covers and other truck and Jeep accessories.

Equian modifies structure

Equian added a $100 million delayed-draw term loan to its transaction that is talked at Libor plus 375 bps to 400 bps with a 1% Libor floor, an original issue discount of 99 to 99.5, and a ticking fee starting on day 31 of the full margin plus the greater of 1% and adjusted Libor, according to a market source.

The company’s now $455 million in senior secured credit facilities also include a $30 million five-year revolver talked at Libor plus 375 bps to 400 bps with a 0% Libor floor, and a $325 million seven-year covenant-light first-lien term loan B talked at Libor plus 375 bps to 400 bps with a 1% Libor floor, an original issue discount of 99 to 99.5 and 101 soft call protection for six months.

The delayed-draw and funded term loans will allocate as a strip.

Recommitments are due at 5 p.m. ET on Friday, the source added.

Morgan Stanley Senior Funding Inc., SunTrust Robinson Humphrey Inc. and UBS Investment Bank are leading the deal that will be used to refinance existing debt and to fund general corporate purposes, and the delayed-draw term loan will be used with cash from the balance sheet to fund potential near-term acquisition targets.

Equian is an Indianapolis-based payment integrity platform.

Aptean upsizes

Aptean increased its fungible add-on senior secured covenant-light first-lien term loan B due Dec. 20, 2022 to $100 million from $50 million and moved up the commitment deadline to 5 p.m. ET on Thursday from noon ET on Friday, according to a market source.

Pricing on the add-on loan is Libor plus 500 bps with a 1% Libor floor, and the debt has 101 soft call protection through June 20. The add-on loan is offered at a par issue price.

Morgan Stanley Senior Funding Inc., Macquarie Capital (USA) Inc., MUFG and SunTrust Robinson Humphrey Inc. are leading the deal that will be used for general corporate purposes, including to repay drawn revolver borrowings, to fund near-term acquisitions and to pay fees and expenses related to the financing.

Aptean is an Alpharetta, Ga.-based provider of enterprise application software.

KIK revises deadline

KIK Custom Products accelerated the commitment deadline on its $200 million add-on senior secured first-lien term loan B due Aug. 26, 2022 to noon ET on Friday from 5 p.m. ET on Tuesday, a market source said.

Pricing on the add-on term loan is Libor plus 450 basis points with a 1% Libor floor, in line with existing term loan pricing, and the debt is getting 101 soft call protection for six months. The add-on loan is talked with an original issue discount in the range of 99 to 99.5.

Barclays, BMO Capital Markets, Nomura, Macquarie Capital (USA) Inc. and SunTrust Robinson Humphrey Inc. are leading the deal that will be used for general corporate purposes, to fund an ABL repayment and to finance a $90 million acquisition.

KIK is an Ontario-based manufacturer of consumer products.

CenturyLink sets guidance

In more primary news, CenturyLink held its lender call on Thursday, launching its $4.5 billion covenant-light term loan B due January 2025 at talk of Libor plus 300 bps to 325 bps with a 0% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, according to a market source.

Commitments are due at noon ET on May 18, the source said.

Based on filings with the Securities and Exchange Commission, the company is also expected to get a $2 billion revolver and a $1.5 billion term loan A.

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., Barclays, Goldman Sachs Bank USA, J.P. Morgan Securities LLC, RBC Capital Markets, MUFG, Wells Fargo Securities LLC, Mizuho Bank and SunTrust Robinson Humphrey Inc. are leading the deal.

CenturyLink buying Level 3

Proceeds from CenturyLink’s credit facility, cash on hand and an expected issuance of debt securities will be used to fund the acquisition of Level 3 Communications Inc. for $26.50 per share in cash and a fixed exchange ratio of 1.4286 shares of CenturyLink stock for each Level 3 share they own, which implies a purchase price of $66.50 per Level 3 share. The transaction is valued at about $34 billion, including the assumption of debt.

CenturyLink shareholders will own around 51% and Level 3 shareholders will own about 49% of the combined company, and the combined company is expected to have pro forma net leverage of less than 3.7 times at close, including run-rate synergies.

Closing is expected by the end of the third quarter, subject to regulatory approvals, approval of CenturyLink and Level 3 shareholders and other customary conditions.

CenturyLink is a Monroe, La.-based communications, hosting, cloud and IT services company. Level 3 is a Broomfield, Colo.-based provider of communications services to enterprise, government and carrier customers.

CHG launches

CHG Healthcare launched on its lender call a repricing of its $1.12 billion term loan at talk of Libor plus 300 bps to 325 bps with a 1% Libor floor, a par issue price and 101 soft call protection for six months, according to a market source.

Commitments are due on May 17, the source said.

Jefferies Finance LLC is leading the deal that will reprice the existing term loan down from Libor plus 375 bps with a 1% Libor floor.

CHG is a Salt Lake City-based health care staffing firm.

CityMD terms surface

CityMD came out with talk of Libor plus 450 bps with a 1% Libor floor and an original issue discount of 99 on its $225 million seven-year covenant-light first-lien term loan a few hours before the 2 p.m. ET bank meeting kicked off to launch the transaction to investors, a market source said.

Included in the term loan is 101 soft call protection for six months.

The company’s $255 million in credit facilities (B3/B-) also provide for a $30 million revolver.

Commitments are due at 5 p.m. ET on May 25.

Credit Suisse Securities (USA) LLC and SunTrust Robinson Humphrey Inc. are leading the deal that will be used to help fund the buyout of the company by Warburg Pincus.

CityMD is an urgent care provider in the New York Metro area.

TRC holds meeting

TRC had its bank meeting and, with the event talk, on its $375 million in credit facilities was announced, a market source said.

The $60 million five-year revolver is talked at Libor plus 475 bps, and the $315 million seven-year covenant-light first-lien term loan is talked at Libor plus 475 bps with a 1% Libor floor and an original issue discount of 99, the source added.

Commitments are due on May 24.

UBS Investment Bank, Barclays and Citizens are leading the deal that will help fund the buyout of the company by New Mountain Capital LLC in an all-cash transaction valued at $17.55 per share of common stock.

Closing is expected before June 30, subject to the approval of TRC’s stockholders, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and other customary conditions.

TRC is a Windsor, Conn.-based engineering, environmental consulting and construction management firm.

SiteOne releases talk

SiteOne Landscape Supply hosted its lender call and released talk on its $297 million covenant-light term loan due April 2022 at Libor plus 350 bps with a 1% Libor floor, a par issue price and 101 soft call protection for six months, a market source remarked.

Commitments are due at 5 p.m. ET on May 18, the source added.

UBS Investment Bank is leading the deal that will be used to reprice an existing term loan down from Libor plus 450 bps with a 1% Libor floor.

SiteOne is a Roswell, Ga.-based distributor of wholesale irrigation, landscape lighting, nursery, hardscapes, maintenance products and supplies for the green industry.

Civitas readies repricing

Civitas Solutions emerged with plans to hold a lender call at 11 a.m. ET on Friday to launch a repricing of its $636 million term loan B, according to a market source.

Barclays is leading the deal, for which cashless roll will be available.

Civitas is a Boston-based provider of home and community-based health and human services.

Ashland coming soon

Ashland Global Holdings scheduled a bank meeting for 1:30 p.m. ET in New York on Monday to launch a new loan transaction, a market source said.

Citigroup Global Markets Inc. is the left lead on the deal.

In April, the company announced an agreement to acquire Pharmachem Laboratories Inc. for $660 million in cash and said that funding for the transaction would come from bank financing and available cash.

Closing on the acquisition is expected to close before the end of the June quarter.

Ashland is a Covington, Ky.-based specialty chemicals company.

SeaStar on deck

SeaStar Solutions set a lender call for Friday to launch a $70 million add-on term loan B, according to a market source.

RBC Capital Markets is the left lead on the deal that will be used for acquisition financing.

SeaStar is a Litchfield, Ill.-based manufacturer and distributor of marine steering and control systems and engine and drive parts.

BayClub allocates

Also on the new deal front, BayClub wrapped syndication of its $60 million incremental first-lien term loan due August 2022 at talk of Libor plus 650 bps with a 1% Libor floor and an original issue discount of 99, a market source remarked.

The spread and floor on the incremental loan matches existing term loan pricing.

Allocations went out on Thursday, the source added.

Jefferies Finance LLC is leading the deal that will be used to fund the acquisition of more clubs.

Closing is targeted for the week of May 15.

BayClub is a San Francisco-based active lifestyle and hospitality company.

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