Patterson Medical, MWI, Headwaters break; Fortescue rises with paydown; WEX sets changes

By Sara Rosenberg

New York, June 23 – Patterson Medical set the spread on its incremental term loan B at the high end of revised guidance and widened the original issue discount, and MW Industries (MWI Holdings Inc.) finalized pricing on its first-lien term loan at the wide end of talk and tightened the issue price on its second-lien term loan, and then both deals broke for trading on Thursday.

Also in the secondary market, Headwaters Inc.’s repriced term loan B freed to trade above its issue price, and Fortescue Metals Group’s term loan strengthened on partial repayment news.

Back in the primary market, WEX Inc. lowered pricing on its term loan B, adjusted the step-down and extended the call protection, Give & Go Prepared Foods Corp. released price talk with launch, and Douglas Dynamics Inc. set a launch date for its incremental term loan.

Patterson updates pricing

Patterson Medical finalized the spread on its $330 million incremental covenant-light term loan B due August 2022 at Libor plus 475 basis points, the high end of revised talk of Libor plus 450 bps to 475 bps and wide of initial talk of Libor plus 425 bps, and changed the original issue discount to 98 from revised talk of 99 and initial talk of 99 to 99.5, according to a market source.

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

The company will change the spread on its existing term loan to match the spread on the incremental term loan to create a fungible tranche.

Recommitments were due at 2:30 p.m. ET on Thursday, the source said.

Patterson tops OID

With final terms in place, Patterson Medical’s term loan B made its way into the secondary market, with levels quoted at 98¼ bid, a source remarked.

Proceeds from the loan will be used to help fund the acquisition of Performance Health from Gridiron Capital.

Deutsche Bank Securities Inc., Barclays, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC are leading the debt.

Closing is expected this summer, subject to customary conditions.

Patterson Medical, a Madison Dearborn Partners portfolio company, is a Warrenville, Ill.-based distributor of rehabilitation, sports medicine and assistive patient products. Performance Health is an Akron, Ohio-based manufacturer and supplier of consumer branded health, wellness and self-care products.

MWI tweaked, trades

MW Industries set pricing on its $325 million four-year first-lien term loan (B2/B) at Libor plus 550 bps, the high end of the Libor plus 525 bps to 550 bps talk, and left the 1% Libor floor, original issue discount of 99 and 101 soft call protection for one year intact, according to a market source.

In addition, the company revised the original issue discount on its $105 million 4.5-year second-lien term loan (Caa2/CCC+) to 98 from talk of 97 to 97.5, the source said. Unchanged on the tranche was pricing of Libor plus 925 bps with a 1% Libor floor and call protection of 102 in year one and 101 in year two.

The company’s $470 million senior secured credit facility includes a $40 million revolver (B2/B).

After terms finalized, the first-lien term loan broke for trading at 99¼ bid, 100¼ offered, and the second-lien term loan broke at 98 bid, par offered, the source added.

UBS Investment Bank and Credit Suisse Securities (USA) LLC are leading the deal that refinance debt.

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

Headwaters frees up

Headwaters’ repriced $422 million term loan B due March 24, 2022 began trading as well, with levels quoted at 100 1/8 bid, 100 3/8 offered, according to a trader.

Pricing on the loan is Libor plus 300 bps with a 1% Libor floor, and it was issued at par. The debt includes 101 soft call protection for six months.

Deutsche Bank Securities Inc. is leading the deal that is expected to close on June 30.

The repricing is taking pricing on the term loan B down from Libor plus 350 bps with a 1% Libor floor.

Headwaters is a South Jordan, Utah-based manufacturer of light building products and heavy construction materials.

Fortescue gains ground

In more trading news, Fortescue Metals’ term loan moved higher as the company announced plans to repay $500 million of the 2019 senior secured term loan at par on Tuesday, traders remarked.

The term loan was quoted by one trader at 94½ bid, 95½ offered, up from 92½ bid, 93½ offered, and by a second trader at 94¾ bid, 95¼ offered, up from 92¾ bid, 93½ offered.

Funds for the repayment will come from accumulated cash.

Including this latest repayment, fiscal year 2016 debt repayments total $2.9 billion, which reduces annual interest expense by $186 million.

Fortescue is a Perth, Australia-based producer of iron ore.

WEX reworks loan

Returning to the primary market, WEX trimmed pricing on its $1.21 billion seven-year term loan B to Libor plus 350 bps from Libor plus 400 bps, modified the step-down to Libor plus 325 bps when consolidated total leverage is less than or equal to 3.5 times from a step-down to Libor plus 375 bps at consolidated total leverage that was still to be determined, and extended the 101 soft call protection to one year from six months, a market source said.

Also, the 12-month MFN sunset was removed, setting the 50-bps MFN for the life of the deal, and the incremental allowance was changed to the greater of $375 million and 4 times total leverage from the greater of $450 million and 4 times total leverage, the source continued.

The term loan B still has a 0.75% Libor floor and an original issue discount of 99.

Recommitments were due at 2:30 p.m. ET on Thursday and allocations are targeted for Friday, the source added.

WEX lead banks

Bank of America Merrill Lynch, SunTrust Robinson Humphrey Inc., MUFG and Citizens Bank are leading WEX’s new bank debt.

The company said in a filing with the Securities and Exchange Commission that, along with the term B, it expects to get a $470 million revolver, under which $200 million will be drawn, and a $445 million term loan A.

Proceeds from the $2,125,000,000 credit facility (Ba3/BB-) will be used to help fund the acquisition of Electronic Funds Source LLC, a provider of payments solutions, for $1.1 billion in cash and the issuance of 4 million shares of common stock to Warburg Pincus, Electronic Funds Source’s current owner.

The credit facility will also be used to help repay existing revolver borrowings of $219 million and repay an existing $452 million term loan A.

Total secured debt to adjusted EBITDA is 4.7 times, and total debt to adjusted EBITDA is 4.7 times.

Closing on the acquisition is subject to regulatory approvals and other customary conditions.

WEX is a South Portland, Maine-based provider of corporate payment solutions.

Give & Go discloses talk

Give & Go Prepared Foods held its bank meeting on Thursday, launching its $375 million first-lien covenant-light term loan (B1/B) with talk of Libor plus 450 bps to 475 bps with a 1% Libor floor and an original issue discount of 99, according to a market source.

Commitments are due on July 7, the source said.

Deutsche Bank Securities Inc., Antares Capital, BMO Capital Markets and HSBC Securities (USA) Inc. are leading the deal that will be used to help fund the buyout of the company by Thomas H. Lee Partners LP from OMERS Private Equity.

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

Give & Go is a Toronto-based manufacturer of value-added baked goods.

Tranzact sets deadline

Tranzact is asking lenders to get their commitments in on July 11 for its $225 million senior secured credit facility that launched with a morning bank meeting, a market source said.

As previously reported, the facility consists of a $40 million revolver, and a $185 million seven-year first-lien term loan talked at Libor plus 575 bps to 600 bps with a 1% Libor floor, an original issue discount of 98.5 to 99 and 101 soft call protection for six months.

SunTrust Robinson Humphrey Inc., ING Capital LLC, Citizens Bank and Natixis are leading the deal that will be used with a privately placed second-lien term loan to help fund the buyout of the company by Clayton, Dubilier & Rice.

First-lien leverage is 4.2 times, and total leverage is 5.9 times.

Tranzact is a Fort Lee, N.J.-based provider of direct-to-consumer sales and marketing solutions for insurance carriers.

Douglas timing emerges

Douglas Dynamics emerged with plans to hold a meeting on Monday to launch its recently announced fungible $130 million incremental term loan, according to a market source.

The company’s existing term loan is priced at Libor plus 425 bps with a 1% Libor floor.

J.P. Morgan Securities LLC and Wells Fargo Securities LLC are leading the deal that will be used with an ABL revolver draw and cash on hand to fund the $206 million acquisition of Dejana Truck and Utility Equipment.

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

Douglas Dynamics is a Milwaukee-based manufacturer of vehicle attachments and equipment. Dejana is a Kings Park, N.Y.-based truck equipment company.

iStar wraps

In other news, iStar Inc. closed on its $450 million senior secured term loan (B+) due July 1, 2020 that is priced at Libor plus 450 bps with a 1% Libor floor, and was issued at an original issue discount of 99, a news release said.

J.P. Morgan Securities LLC, Barclays and Bank of America Merrill Lynch led the deal that was used to refinance a secured term loan due March 2017, to partially pay down revolving credit facility borrowings and to pay related transaction costs.

iStar is a New York-based investor and developer of real estate and real estate related projects.

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