Reynolds Group tweaks loan deal; Service Logic allocations emerge; OWIC announced

By Sara Rosenberg

New York, July 18 – In the leveraged loan market on Monday, Reynolds Group Holdings Inc. trimmed the size of its U.S. term loan and added a tack-on notes offering to its refinancing plans, and Service Logic (MSHC Inc.) communicated allocations on its credit facility.

Switching to the secondary market, a $390 million Offers Wanted In Competition surfaced in the morning.

Reynolds downsizes

Reynolds Group cut its U.S. dollar 6.5-year term loan size to $1,973,000,000 from $2,223,000,000 and left talk at Libor plus 325 basis points to 350 bps with a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, according to a market source.

The company is still also seeking a €250 million 6.5-year term loan talked at Euribor plus 375 bps to 400 bps with no floor, a discount of 99 and 101 soft call protection for six months.

Commitments are due at 5 p.m. ET on Tuesday, moved up from Wednesday, the source added.

Credit Suisse Securities (USA) LLC and HSBC Securities (USA) Inc. are leading the deal (B1) that will be used with, as a result of the U.S. loan downsizing, a $250 million 5 1/8% add-on senior secured notes offering, to refinance existing term loans.

Along with the new term loans, the company is looking to resize its revolver as a single $400 million facility and extend the maturity to five years from closing.

Reynolds Group is an Auckland, New Zealand-based provider of packaging and storage products.

Service Logic allocates

Service Logic allocated during the session its $164.8 million five-year senior credit facility that is split between a $10 million revolver, a $103.4 million term loan and a $51.4 million delayed-draw term loan, a source said.

Pricing on the term loans is Libor plus 500 bps with a step-down to Libor plus 475 bps when first-lien leverage falls below 3.5 times and a 1% Libor floor. The debt was sold at an original issue discount of 99 and includes 101 soft call protection for six months. The delayed-draw term loan is available for 18 months, with a 1.5% unused fee during that time.

Last week, the pricing step-down was added to the term loans.

Antares Capital is leading the deal that will be used with about $15 million of pre-placed mezzanine financing to refinance existing debt and fund add-on acquisitions.

Closing is expected on Tuesday.

Service Logic, a portfolio company of Sterling Investment Partners, is a Denver-based heating, ventilation and air conditioning service provider.

OWIC surfaces

Over in the secondary market, a $390 million Offers Wanted In Competition emerged, with offers due by 2 p.m. ET on Tuesday, a trader remarked.

Some of the names in the OWIC include Amaya Holdings BV, Booz Allen Hamilton Inc., CSC Holdings LLC, Fairpoint Communications Inc., Keurig Green Mountain Inc., NXP BV, Protection One Inc., Samsonite International SA, Tribune Publishing Co. and XPO Logistics Inc.

There are about 76 issuers in the OWIC, the trader added.

Douglas Dynamics closes

In other news, Douglas Dynamics Inc. completed its $206 million acquisition of Dejana Truck and Utility Equipment, according to a news release.

To help fund the transaction, Douglas Dynamics got a new fungible $130 million incremental term loan (B2) priced at Libor plus 425 bps with a 1% Libor floor, which matches existing term loan pricing. The add-on term loan was sold at an original issue discount of 99.5 and has 101 soft call protection for six months.

During syndication, the discount on the add-on loan was tightened from 99.

J.P. Morgan Securities LLC and Wells Fargo Securities LLC led the deal.

Other funds for the acquisition came from an ABL revolver draw and cash on hand.

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

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