Nomad Foods, Watlow Electric, Angus Chemical term loans free to trade; OpenText on deck

By Sara Rosenberg

New York, Nov. 4 – Nomad Foods lowered the spread on its U.S. term loan B and finalized the original issue discount at the tight end of guidance on Friday morning, downsized the U.S. loan and added a euro term loan B in the early afternoon, and then broke for trading late in the day.

Also, Watlow Electric Manufacturing Co. firmed pricing on its incremental term loan at the high end of talk and the issue price at the tight end of guidance, and Angus Chemical Co. set the original issue discount on its incremental term loan at the tight side of talk and sweetened the call protection, and then both of these deals freed to trade as well.

In more happenings, OpenText Corp. joined the near-term calendar with a term loan B for its acquisition of Micro Focus International.

Nomad reworked

Nomad Foods trimmed pricing on its U.S. seven-year senior secured covenant-lite term loan B (B1/BB-/BB+) to SOFR plus 375 basis points from SOFR plus 425 bps and set the original issue discount at 96, the tight end of the 95 to 96 talk, early Friday morning, a market source remarked.

Then, shortly after the noon ET commitment deadline, the company scaled back the U.S. term loan to $700 million from $825 million, and added a privately placed €130 million term loan B priced at Euribor plus 350 bps with a 0% floor and an original issue discount of 97.5, the source continued.

As before, the U.S. term loan has a 0.5% floor, 101 soft call protection for six months and 0 bps CSA.

The new debt will be used to help refinance an existing $907 million U.S. term loan B due 2024, for general corporate purposes and to pay transaction expenses.

Nomad hits secondary

On Friday afternoon, Nomad Foods’ U.S. term loan B broke for trading, with levels quoted at 96½ bid, 97½ offered, another source added.

Citigroup Global Markets Inc. and Morgan Stanley Senior Funding Inc. are the joint lead arrangers on the deal. Deutsche Bank Securities Inc., Goldman Sachs Bank USA, JPMorgan Chase Bank and Jefferies LLC are joint passive leads on both term loans. Rabobank is a joint passive lead on the euro term loan. Credit Suisse is the administrative agent.

Closing is expected on Thursday.

Nomad Foods is a U.K.-based frozen foods company.

Watlow finalized, frees

Watlow Electric Manufacturing firmed the spread on its non-fungible $175 million incremental term loan (B) due March 2028 at SOFR plus 500 bps, the high end of the SOFR plus 475 bps to 500 bps, and set the original issue discount at 94, the tight end of the 93 to 94 talk, according to a market source.

The term loan still has a 0.5% floor, CSA of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate, and 101 soft call protection for six months.

Late in the day, the incremental term loan freed to trade, with levels quoted at 94½ bid, 95½ offered, a trader added.

BMO Capital Markets and Citizens are leading the deal that will be used to help fund the acquisition of Eurotherm from Schneider Electric.

Watlow is a St. Louis-based designer and manufacturer of complete thermal systems. Eurotherm is a Worthing, U.K.-based provider of temperature, power, and process control, measurement and data management equipment, systems, software, and services for industrial markets.

Angus updated, breaks

Angus Chemical finalized the original issue discount on its non-fungible $125 million incremental term loan (B2/B-/BB-) due November 2027 at 93, the tight end of the 92 to 93 talk, and extended the 101 soft call protection to one year from six months, a market source said.

Pricing on the incremental term loan remained at SOFR plus 475 bps with a 25 bps step-down upon an initial public offering and a 0.75% floor.

In the morning, the incremental term loan made its way into the secondary market, with levels quoted at 93¼ bid, 94¼ offered, another source added.

JPMorgan Chase Bank is leading the deal that will be used for general corporate purposes, to fund an acquisition and to refinance existing debt.

Angus is a Buffalo Grove, Ill.-based specialty and fine chemical company.

OpenText coming soon

OpenText emerged with plans to hold a lender call at 1:30 p.m. ET on Monday to launch a $3.085 billion seven-year senior secured term loan B, according to a market source.

The term loan has 101 soft call protection for six months, the source said.

Barclays, BMO Capital Markets Corp., RBC Capital Markets, Citigroup Global Markets Inc., MUFG, HSBC Securities (USA) Inc., PNC Capital Markets, National Bank of Canada and CIBC are leading the deal that will be used with $1.5 billion of other senior secured debt to fund the acquisition of Micro Focus International for 532 pence per share, implying an enterprise value of about $6 billion inclusive of Micro Focus’ cash and debt.

Closing is expected in the first quarter of 2023, subject to Micro Focus shareholder approval, the sanction of the Scheme by the Court, and antitrust and foreign investment approvals.

OpenText is a Waterloo, Ont.-based software provider of business-to-business cloud integration services. Micro Focus is a Newbury, England-based enterprise software company.

Loan indices slide

In other news, IHS Markit’s iBoxx loan indices were lower on Thursday, with the Leveraged Loan indexes (MiLLi) closing out the day down 0.07% and the Liquid Leveraged Loan indices (LLLi) closing out the day down 0.15%.

Month to date, the MiLLi is up 0.21% and year to date its down 2.55%. The LLLi is up 0.22% month to date and down 3.22% year to date.

Average secondary market bids in the U.S. on Wednesday were 92.36, down 0.03% from the previous day and down 4.64% year to date.

According to the IHS Markit data, some of the top advancers on Thursday were Goodpack’s June 2018 covenant-lite term loan B1 at 97.63, up from 91.83, MetroNet Systems’ June 2021 covenant-lite term loan at 99.30, up from 97.50, and Cineworld’s February 2018 U.S. covenant-lite term loan at 32.83, up from 32.32.

Some top decliners on Thursay were Mitel Networks’ November 2018 covenant-lite fourth out no roll-up term loan at 30.83, down from 32.50, AMC Entertainment’s April 2019 covenant-lite term loan B at 67.39, down from 69.86, and ACProducts/Cabinetworks’ May 2021 first-lien term loan B at 66.63, down from 68.43.

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