Delta tweaks deal; US Foods terminates syndication process; T-Mobile comes to market

By Sara Rosenberg

New York, April 27 – In the primary market on Monday, Delta Air Lines Inc. lowered the spread on its term loan B, and US Foods Inc. pulled its term loan B from syndication and went the route of privately placing the transaction.

Also during the session, T-Mobile USA Inc. released price talk on its term loan with the launch of syndication in the morning.

Delta cuts spread

Delta Air Lines trimmed pricing on its $1.5 billion three-year first-lien senior secured term loan B (Baa2/BBB-) to Libor plus 475 basis points from Libor plus 500 bps, according to a market source.

The term loan still has a 1% Libor floor, an original issue discount of 97 and call protection of non-callable for one year, with a make-whole call at Treasuries plus 50 bps.

Commitments due at noon ET on Monday.

Barclays, J.P Morgan Securities LLC, BofA Securities, Inc., BBVA, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc., SMBC, Standard Chartered, US Bank and Wells Fargo Securities LLC are leading the deal. Barclays is the administrative agent.

The term loan will be used with $3.5 billion of senior secured notes, upsized from $1.5 billion, for general corporate purposes and to support liquidity.

Delta is an Atlanta-based airline company.

US Foods withdrawn

US Foods removed from market its $300 million five-year senior secured covenant-lite term loan B (B3/BB) as the decision was made to privately place the debt, according to a market source.

The term loan was talked Libor plus 325 bps with 50 bps step ups per annum, a 1% Libor floor, an original issue discount of 92 to 93 and 101 soft call protection for six months.

Citigroup Global Markets and BofA Securities, Inc. were acting as the joint lead arrangers on the deal.

The term loan was used with some bond proceeds to help fund the recently completed acquisition of Smart Foodservice Warehouse Stores, a Portland, Ore.-based operator of cash and carry stores that serve restaurants and other food business customers, from Apollo Global Management Inc. for $970 million in cash.

US Foods is a Rosemont, Ill.-based foodservice distributor.

T-Mobile sets talk

T-Mobile USA launched to investors in the morning without a lender call its $4 billion covenant-lite first-lien term loan due April 1, 2027 with original issue discount talk of 98, a market source remarked.

Pricing on the term loan, which was outlined at close on April 1, is Libor plus 300 bps with a 0% Libor floor, and the debt has 101 soft call protection through Oct. 1, 2020.

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

The company’s $8 billion of credit facilities (Baa3/BBB-/BBB-) also include a $4 billion revolver due 2025 that is priced at Libor plus 125 bps with a 0% Libor floor, subject to a grid based on first-lien net leverage.

T-Mobile lead banks

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Barclays, Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc., RBC Capital Markets, BNP Paribas Securities Corp., Commerzbank, Credit Agricole, TD Securities (USA) LLC, Wells Fargo Securities LLC, Santander, Societe Generale, SunTrust Robinson Humphrey Inc., NatWest and U.S. Bank are leading T-Mobile’s credit facilities. Deutsche is the administrative agent.

The bank debt is being used with $19 billion of senior secured notes to help refinance certain existing debt at T-Mobile and Sprint Corp. in connection with the completion of the merger of the two companies, and for post-closing working capital needs of the combined company. The companies merged in an all-stock transaction at a fixed exchange ratio of 0.10256 T-Mobile shares for each Sprint share.

T-Mobile is a Bellevue, Wash.-based provider of wireless services. Sprint is an Overland Park, Kan.-based communications services company. The combined company is named T-Mobile and has headquarters in Bellevue, Wash.

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