Leidos/Abacus, J.C. Penney, J.D. Power, Ennis-Flint, Cinemark, Ferrara Candy free to trade

By Sara Rosenberg

New York, June 9 – Leidos Holdings Inc./Abacus Innovations Corp.’s credit facility hit the secondary market on Thursday with the term loan B quoted above its original issue discount, and J.C. Penney Co. Inc., J.D. Power, Ennis-Flint and Cinemark USA Inc. freed up too.

Also, Ferrara Candy Co. Holdings Inc. increased the size of its term loan B, lowered the spread and tightened the original issue discount, and then it began trading as well.

In more happenings, St. George’s University set pricing on its term loan B at the high end of guidance, Vencore Inc. trimmed spreads on its first-and second-lien term loans and modified the issue price on the second-lien tranche, and Cvent Inc. moved up the commitment deadline on its first-lien term loan B.

Furthermore, Strategic Partners Acquisition Corp., MW Industries (MWI Holdings Inc.), Pomeroy Group and Northstar Travel Group released price talk with launch, and TriMark (TMK Hawk Parent Corp.) emerged with new deal plans.

Leidos starts trading

Leidos/Abacus’ credit facility broke for trading on Thursday, with the $1,131,450,000 seven-year covenant-light term loan B at Abacus quoted at par bid, par ½ offered, according to a trader.

Pricing on the term loan B is Libor plus 275 basis points with no floor, and it was sold at an original issue discount of 99.75. The debt has 101 soft call protection for six months and a ticking fee of half the spread from days 31 to 60 and the full spread thereafter.

Recently, the spread on the term loan B finalized at the low end of the Libor plus 275 bps to 300 bps talk, the 0.75% Libor floor was eliminated and the discount was tightened from 99.5.

The company’s $3,281,450,000 senior secured credit facility (Ba1/BBB-) also includes a $750 million five-year revolver at Leidos, a $690 million five-year term loan A at Leidos, a $400 million three-year term loan A at Abacus and a $310 million five-year term loan A at Abacus, all priced at Libor plus 225 bps.

Citigroup Global Markets Inc., MUFG, Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Goldman Sachs & Co., Scotiabank and Wells Fargo Securities LLC are leading the deal.

Leidos, Abacus merging

The Leidos/Abacus credit facility is being done in connection with the merger of Leidos with Lockheed Martin Corp.’s Bethesda, Md.-based realigned information systems and global solutions business (Abacus).

Proceeds from the Leidos credit facility will be used with cash on hand to pay a special dividend to Leidos stockholders in an amount not to exceed $1.03 billion and to repay existing debt, and the Abacus credit facility will be used to make a special cash payment of $1.8 billion to Lockheed Martin.

At closing, Lockheed Martin shareholders will receive about 50.5% of the combined company on a fully diluted basis, with pre-transaction Leidos shareholders owning the balance.

Closing is expected in August, subject to approval by the shareholders of Leidos, regulatory approvals and customary conditions.

Leidos is a Reston, Va.-based provider of technology and sector expertise to customers in national security, health and engineering.

J.C. Penney tops OID

Another deal to begin trading was J.C. Penney’s $1,688,000,000 seven-year term loan, with levels quoted at par bid, par ½ offered, according to a trader.

The term loan is priced at Libor plus 425 bps with a 1% Libor floor and was issued at a discount of 99.5. Included in the debt is 101 soft call protection for six months.

During syndication, the size on the loan firmed from talk at launch of up to $2 billion, pricing was lowered from talk of Libor plus 450 bps to 475 bps and the original issue discount was tightened from 99.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance an existing real estate term loan.

J.C. Penney is a Plano, Texas-based apparel and home furnishings retailer.

J.D. Power frees up

J.D. Power’s credit facility emerged in the secondary market too, with its $410 million seven-year first-lien covenant-light term loan (B1) quoted at par bid, par ½ offered before moving up to par 1/8 bid, par 5/8 offered, and its $120 million eight-year second-lien covenant-light term loan (Caa1) quoted at 99 bid, 99½ offered, a trader said.

Pricing on the first-lien term loan is Libor plus 425 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.5. The debt has 101 soft call protection for six months.

The second-lien term loan is priced at Libor plus 850 bps with a 1% Libor floor, and it was issued at a discount of 98.5. This tranche has call protection of 102 in year one and 101 in year two.

Recently, the first-lien term loan was upsized from $385 million, pricing was lowered from Libor plus 500 bps and the discount was revised from 99. Also, pricing on the second-lien term loan was cut from Libor plus 900 bps, the discount was tightened from 98 and the call protection was modified from 103 in year one, 102 in year two and 101 in year three.

J.D. Power getting revolver

Along with the first-and second-lien term loans, J.D. Power’s $565 million credit facility provides for a $35 million revolver.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to help fund the acquisition of the company by XIO Group from McGraw Hill Financial Inc. for $1.1 billion.

As a result of the recent first-lien term loan upsizing, the equity for the transaction was reduced.

Closing on the acquisition is expected in the third quarter, subject to regulatory approvals and customary conditions.

J.D. Power is a Costa Mesa, Calif.-based consumer data and analytics company.

Ennis-Flint hits secondary

Ennis-Flint’s credit facility began trading as well, with its $442 million seven-year senior secured first-lien term loan B seen at par bid, 101 offered, a trader remarked.

The term loan B is priced at Libor plus 400 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.75. This tranche includes 101 soft call protection for six months.

Earlier this week, the spread on the term loan was revised from Libor plus 425 bps and the discount was changed from 99.

The company’s $517 million credit facility (B1/B-) also provides for a $75 million revolver.

Goldman Sachs & Co., Antares Capital and Jefferies Finance LLC are leading the deal that will be used with a $172 million privately placed second-lien term loan (CCC) to help fund the buyout of the company by Olympus Partners.

Ennis-Flint is a Thomasville, N.C.-based pavement marking company.

Cinemark breaks

Cinemark’s repriced $664 million covenant-light term loan B due May 8, 2022 also freed up, with levels quoted at par bid, par 3/8 offered, according to a trader.

Pricing on the loan is Libor plus 275 bps with no Libor floor, and it was issued at par. The debt has 101 soft call protection for six months.

Barclays is leading the deal that will be used to reprice the existing term loan B from Libor plus 300 bps with no Libor floor.

Cinemark is a Plano, Texas-based motion picture exhibitor.

Ferrara revised, trades

Ferrara Candy lifted its seven-year senior secured first-lien covenant-light term loan B to $535 million from $500 million, cut pricing to Libor plus 450 bps from Libor plus 475 bps and moved the original issue discount to 99.5 from 99, a market source remarked.

As before, the loan has a 1% Libor floor and 101 soft call protection for six months.

Commitments were due at 2 p.m. ET on Thursday, and then the debt emerged in the secondary market late in the day at par bid, par ½ offered, a trader added.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to refinance existing debt and to pay a dividend to existing shareholders. Due to the term loan upsizing, the dividend is being increased by $25 million, and there will be a $10 million paydown on the company’s second-lien term loan.

Closing is expected during the week of June 13.

Ferrara Candy is an Oakbrook Terrace, Ill.-based confectionery and candy manufacturer.

St. George’s updates deal

St. George’s University set pricing on its $600 million six-year senior secured term loan B at Libor plus 525 bps, the wide end of the Libor plus 500 bps to 525 bps talk, and left the 1% Libor floor, original issue discount of 98.5 and 101 soft call protection for one year unchanged, according to a market source.

Additionally, the incremental allowance was reduced to $50 million from $100 million, the unlimited incremental allowance was revised to 2.5 times net secured leverage from 3.25 times net secured leverage and revisions were made to the incremental builder, the available amount and unlimited restricted payments.

Furthermore, the excess cash flow sweep was changed to 75% at more than 3.25 times leverage, 50% at 2.5 times to 3.25 times leverage, 25% at 2 times to 2.5 times leverage and 0% at less than 2 times leverage, from 50% at more than 3 times leverage 25% at 2.5 times to 3 times leverage and 0% at less than 2.5 times leverage, the source said.

St. George’s lead banks

Goldman Sachs & Co., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Morgan Stanley Senior Funding Inc. are leading St. George’s University’s term loan B.

Commitments are due at 5 p.m. ET on Friday, the source added. The deadline was accelerated from 5 p.m. ET on Tuesday.

Proceeds will be used to repay existing debt, to make a distribution to shareholders and to fund strategic initiatives.

St. George’s University is a Grenada, West Indies-based educational institution, providing students with medical degrees as well as veterinary and liberal arts graduate and undergraduate degrees.

Vencore flexes lower

Vencore reduced pricing on its $545 million first-lien term loan due Nov. 23, 2019 to Libor plus 475 bps from Libor plus 500 bps, and left the 1% Libor floor, original issue discount of 99.28 and 101 soft call protection for one year unchanged, according to a market source.

Furthermore, the company cut pricing on its $240 million second-lien term loan due May 23, 2020 to Libor plus 875 bps from Libor plus 900 bps and set the discount at 98, the tight end of the 97.5 to 98 talk, the source said. This tranche still has a 1% Libor floor and call protection of 102 in year one and 101 in year two.

Previously in syndication, the first-lien term loan was upsized from $515 million and the discount was revised from 99.25, and the second-lien term loan was downsized from $270 million.

Recommitments for the $785 million of term loans are due on Friday, the source added.

UBS Investment Bank is leading the deal that will refinance existing debt and fund a dividend.

The company is also looking to amend its credit agreement, and lenders are offered a 25 bps consent fee.

Vencore, formerly known as the SI Organization Inc., is a Chantilly, Va.-based provider of information solutions, engineering and analysis to the U.S. intelligence community, Department of Defense and agencies.

Cvent shutting early

Cvent accelerated the commitment deadline on its $375 million seven-year senior secured first-lien term loan B (B1/B) to 4 p.m. ET on Tuesday from 4 p.m. ET on June 16, a market source said.

The term loan B is talked at Libor plus 500 bps to 525 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

Goldman Sachs & Co., Antares Capital, Jefferies Finance LLC and RBC Capital Markets LLC are leading the deal that will be used with a $225 million privately placed second-lien term loan (CCC) to help fund the buyout of the company by Vista Equity Partners for $36 in cash per share for a total value of about $1.65 billion.

Closing is expected in the third quarter, subject to customary conditions, including the approval of Cvent stockholders and regulatory approvals.

Cvent is a Tysons Corner, Va., cloud-based enterprise event management company.

Strategic Partners sets talk

Strategic Partners held its bank meeting on Thursday, launching its $325 million seven-year first-lien covenant-light term loan with talk of Libor plus 550 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source remarked.

The company’s $370 million credit facility also includes a $45 million revolver.

Commitments are due on June 23, the source added.

UBS Investment Bank, Goldman Sachs & Co. and Credit Suisse Securities (USA) LLC are leading the deal that will be used to help fund the buyout of the company by New Mountain Capital.

Strategic Partners is a Chatsworth, Calif.-based designer and manufacturer of medical apparel and footwear and school uniforms.

MW details surface

MW Industries revealed with its bank meeting that it is seeking a $470 million senior secured credit facility consisting of a $40 million revolver, a $325 million four-year first-lien term loan and a $105 million 4.5-year second-lien term loan, a market source said.

The first-lien term loan is talked at Libor plus 525 bps to 550 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year, and the second-lien term loan is talked at Libor plus 925 bps with a 1% Libor floor, a discount of 97 to 97.5 and call protection of 102 in year one and 101 in year two, the source continued.

Commitments are due on June 23.

UBS Investment Bank and Credit Suisse Securities (USA) LLC are leading the deal that will be used to refinance existing debt.

MW Industries, owned by Genstar Capital, is a Logansport, Ind.-based manufacturer of highly engineered springs and fasteners for OEMs and MROs.

Pomeroy discloses terms

Pomeroy Group held its bank meeting in the afternoon, launching its $240 million 5.5-year first-lien term loan with talk of Libor plus 550 bps with a 1% Libor floor, an original issue discount of 97 to 98 and 101 soft call protection for six months, according to a market source.

The company’s $280 million credit facility (B2/B) also includes a $40 million revolver.

Commitments are due on June 22, the source said.

Natixis is leading the deal that will be used with a $75 million privately placed second-lien term loan to help fund the merger of Pomeroy and Tolt Solutions.

As part of the transaction, Clearlake Capital Group LP entered into a definitive agreement to acquire Pomeroy and simultaneously back the combination of Pomeroy with Tolt Solutions.

First-lien leverage is 3.7 times and total leverage is 4.8 times.

Pomeroy Group is a provider of IT infrastructure solutions and managed services.

Northstar releases guidance

Northstar Travel Group came out with talk of Libor plus 625 bps with a 1% Libor floor, an original issue discount of 98.5 and 101 soft call protection for six months on its $73 million term loan that launched with a bank meeting during the session, according to a market source.

The company’s $85 million credit facility also includes a $12 million revolver.

Commitments are due on June 27, the source said.

Macquarie Capital (USA) Inc. is leading the deal that will be used to back the company’s recently completed buyout by Wasserstein Partners from the Wicks Group of Companies.

Co-investors with Wasserstein included Alberta Teachers’ Retirement Fund Board, John Hancock and Storebrand Insurance.

Northstar Travel is a Secaucus, N.J.-based provider of business-to-business information, content, events, data, research, custom content and software dedicated to the global travel and meeting industries.

TriMark readies call

TriMark set a lender call for 11 a.m. ET on Friday to launch $115 million in fungible term loans talked at Libor plus 425 bps with a 1% Libor floor, in line with existing first-lien term loan pricing, and an original issue discount of 99.5, a market source said.

The debt is split between a $45 million incremental first-lien term loan due Oct. 1, 2021 and a $70 million delayed-draw first-lien term loan due Oct. 1, 2021, the source said.

Commitments are due at 5 p.m. ET on June 16, the source added.

Credit Suisse Securities (USA) LLC and Wells Fargo Securities LLC are leading the deal that will be used for acquisition financing and to refinance an ABL draw that was used to fund a future acquisition.

TriMark is a South Attleboro, Mass.-based provider of equipment, supplies and design services to the foodservice industry.

Kindred completes syndication

In other news, Kindred Healthcare Inc. wrapped syndication of its fungible $200 million add-on term loan at an original issue discount of 99.05, according to a news release.

Pricing on the term loan is Libor plus 325 bps with a 1% Libor floor, and there is 101 soft call protection for six months.

J.P. Morgan Securities LLC is the lead bank on the deal.

Proceeds will be used to pay down ABL revolving credit facility borrowings.

Closing is expected on June 15.

Kindred Healthcare is a Louisville, Ky.-based health care services company.

Nexeo closes

The acquisition of Nexeo Solutions Holdings LLC by WL Ross Holdings Corp. from TPG for up to 35 million shares of WL Ross Holdings common stock plus $1,296,000,000 in cash and assumed net debt has been completed, according to a news release.

To refinance existing debt in support of the acquisition, Nexeo got a $1,205,000,000 credit facility consisting of a $575 million ABL facility and a $655 million seven-year covenant-light term loan B (B3/B).

Pricing on the term loan is Libor plus 425 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.5. The tranche includes 101 soft call protection for six months.

During syndication, the term loan was upsized from $630 million, pricing was lowered from Libor plus 450 bps, the discount was tightened from 99 and the MFN sunset was removed.

Bank of America Merrill Lynch, Jefferies Finance LLC and Deutsche Bank Securities Inc. led the deal.

Nexeo is a Houston-based distributor of chemicals and plastics and provider of environmental services.

TransDigm wraps

TransDigm Inc. received funding of its $1.74 billion seven-year covenant-light term loan F, which is split between $790 million of amended and extended debt, $500 million of funded debt and $450 million of delayed-draw debt, a news release said.

Once the delayed-draw term loan funds, all three term loan F tranches will become one fungible tranche.

Pricing on the term loan F debt is Libor plus 300 bps with a 0.75% Libor floor, and it was sold at an original issue discount of 99.25. There is 101 repricing protection for one year.

During syndication, the $790 million of amended and extended term F debt was added, pricing firmed at the low end of the Libor plus 300 bps to 325 bps talk and the discount was changed from 99.

Credit Suisse Securities (USA) LLC led the deal.

TransDigm buying ILC

Proceeds from TransDigm’s term loan F, along with $950 million of senior subordinated notes, are being used to fund the $1 billion purchase of ILC Holdings Inc., the parent company of Data Device Corp., from Behrman Capital; for general corporate purposes, including potential future acquisitions or dividends and, as a result of the addition of the amended and extended tranche, to repay a portion of the company’s existing term loan C.

In connection with the term loan F, the company amended its existing credit agreement, for which lenders were offered a 5-bps consent fee, and pricing on the existing term loan E was lifted to Libor plus 300 bps from Libor plus 275 bps.

TransDigm is a Cleveland-based designer, producer and supplier of highly engineered aircraft components for use on commercial and military aircraft. ILC is a Bohemia, N.Y.-based supplier of databus and power supply products for the military and commercial aerospace markets.

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