VC GB Holdings, TriMark break; Mallinckrodt, Formula 1, Arch Coal deal revisions emerge

By Sara Rosenberg

New York, Feb. 23 – VC GB Holdings Inc.’s term loans hit the secondary market on Thursday, with the first-and second-lien tranches quoted above their original issue discounts, and TriMark (TMK Hawk Parent Corp.) freed to trade as well.

Moving to the primary market, Mallinckrodt International Finance SA set the spread on its term loan B at the low end of talk and tightened the original issue discount, Formula 1 (Delta Topco Ltd.) increased the size of its first-lien term loan, and Arch Coal Inc. upsized its term loan B and revised the spread and issue price.

Also, Equinox Holdings Inc., Jeld-Wen Inc., Contura Energy Inc., Warrior Met Coal Intermediate Holdco LLC, Cologix Holdings Inc., Navico, Trader Corp., Internet Brands Inc. and Aspen Dental (ADMI Corp.) disclosed price talk with launch, and Caraustar Industries Inc. surfaced with new deal plans.

VC GB frees up

VC GB Holdings, a decorative lighting company, saw its new bank debt begin trading on Thursday, with the $500 million seven-year covenant-light first-lien term loan quoted at par ¼ bid, 101 offered and the $150 million eight-year covenant-light second-lien term loan quoted at 99½ bid, par ½ offered, according to a market source.

Pricing on the first-lien term loan is Libor plus 375 basis points 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 800 bps with a 1% Libor floor and was issued at a discount of 98.5. This tranche has hard call protection of 102 in year one and 101 in year two.

On Wednesday, the first-lien term loan was upsized from $490 million, pricing was cut from talk of Libor plus 400 bps to 425 bps and the discount was revised from 99, and the second-lien term loan was downsized from $160 million while the spread firmed at the low end of the Libor plus 800 bps to 825 bps talk. Also, the 50 bps MFN protection was extended to 18 months from 12 months, the $50 million carve-out from MFN was removed and the cost savings add-backs were capped at 25%.

Deutsche Bank Securities Inc. and Barclays are leading the debt that will fund AEA Investors LP’s investment in Visual Comfort alongside its current investment in Generation Brands. Closing is expected Tuesday.

TriMark hits secondary

TriMark’s $436.5 million first-lien term loan due Oct. 1, 2021 broke for trading too, with levels quoted at par ½ bid, 101 offered, a market source said.

Pricing on the loan is Libor plus 400 bps with a 1% Libor floor, and it was issued at par. The debt has 101 soft call protection for six months.

Of the total amount, $77.5 million is a tack-on that will be used to fund a tuck-in acquisition, and the remainder will be used to reprice an existing $359 million term loan from Libor plus 425 bps with a 1% Libor floor.

During syndication, pricing on the tack-on loan was lowered from Libor plus 425 bps, and the issue price firmed at the tight end of the 99.75 to par talk, and the repricing was added to the transaction.

Credit Suisse Securities (USA) LLC and Wells Fargo Securities LLC are leading the deal.

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

Mallinckrodt tweaks deal

Switching to the primary market, Mallinckrodt International Finance finalized pricing on its $1,862,000,000 term loan B (Ba1/BB+) due Sept. 24, 2024 at Libor plus 275 bps, the low end of the Libor plus 275 bps to 300 bps talk, and moved the original issue discount to 99.875 from 99.75, according to a market source.

The term loan still has a 0.75% Libor floor and 101 soft call protection for six months.

Commitments were due at noon ET on Thursday, the source said.

Deutsche Bank Securities Inc. is leading the deal that will be used to amend and extend an existing term loan B due March 19, 2021 that is priced at Libor plus 250 bps with a 0.75% Libor floor and an existing term loan B-1 due March 19, 2021 that is priced at Libor plus 275 bps with a 0.75% Libor floor.

Mallinckrodt is a U.K.-based specialty pharmaceutical company.

Formula 1 upsizes

Formula 1 lifted its first-lien term loan to $3.15 billion from $2.85 billion and left pricing at Libor plus 325 bps with a step-down to Libor plus 300 bps after six months and if a B2 corporate rating is achieved, a 1% Libor floor and an original issue discount of 99.5, a source said.

The term loan still has 101 soft call protection for six months.

Recommitments were due at the end of the day on Thursday.

KKR Capital Markets is leading the deal that will be used to refinance a $3.15 billion first-lien term loan priced at Libor plus 375 bps with a 1% Libor floor.

The $300 million of cash on hand that was going to be used to pay down the existing first-lien term loan with the refinancing will now instead be used to repay a portion of the company’s existing second-lien term loan, the source added.

Formula 1 is a motorsports business.

Arch Coal reworked

Arch Coal raised its seven-year covenant-light first-lien term loan B to $300 million from $250 million, trimmed pricing to Libor plus 400 bps from Libor plus 450 bps and changed the original issue discount to 99.5 from 99, a market source remarked.

The term loan still has a 1% Libor floor and 101 soft call protection for six months.

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

Credit Suisse Securities (USA) LLC is leading the deal that will be used to refinance existing debt.

Arch Coal is a St. Louis-based coal producer.

Equinox details emerge

Also in the primary market, Equinox hosted its lender meeting on Thursday, at which time lenders were presented with a $1.15 billion credit facility consisting of a $150 million five-year revolver (B1/B+), an $800 million seven-year covenant-light first-lien term loan (B1/B+) and a $200 million eight-year covenant-light second-lien term loan (Caa1/CCC+), according to a market source.

Talk on the first-lien term loan is Libor plus 350 bps with a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, and talk on the second-lien term loan is Libor plus 750 bps with a 1% Libor floor, a discount of 99 and hard call protection of 102 in year one and 101 in year two, the source said.

Commitments are due at noon ET on March 3.

Bank of America Merrill Lynch and Morgan Stanley Senior Funding Inc. are leading the deal that will be used to refinance an existing credit facility, with Bank of America left on the first-lien and Morgan Stanley left on the second-lien.

Equinox is a New York-based exercise and fitness company.

Jeld-Wen repricing

Jeld-Wen launched a repricing of its $1,236,000,000 covenant-light term loan due July 1, 2022 at talk of Libor plus 300 bps with a step-down to Libor plus 275 bps when total net leverage is less than 2.25 times, a 1% Libor floor, a par issue price and 101 soft call protection for six months, a source said.

With the repricing, the Klamath Falls, Ore.-based door and window manufacturer is asking to remove the existing $75 million cap on cash netting for ratio-testing purposes.

Commitments and amendment consents are due by 1 p.m. ET on Tuesday, the source continued.

Barclays and Bank of America Merrill Lynch are leading the deal that will reprice the existing term loan from Libor plus 350 bps with a step-up to Libor plus 375 bps when total net leverage is greater than 3.5 times and a 1% Libor floor.

Net total leverage is 2.65 times.

The transaction is occurring in the context of the company’s initial public offering of common stock that closed on Feb. 1, of which $375 million of net proceeds were used to repay term loans. Under the definition of a repricing transaction in the existing credit agreement, the current 101 soft call protection, effective until May 1, does not apply and therefore no prepayment premium will be offered to existing lenders, the source added.

Contura holds meeting

Contura Energy revealed talk of Libor plus 500 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for one year on its $400 million seven-year covenant-light first-lien term loan (B2/B) that launched with a well-attended bank meeting during the session, a market source remarked.

Commitments are due on March 9, the source added.

Jefferies Finance LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and BMO Capital Markets are leading the deal that will be used to refinance predominantly post emergence debt as well as various other smaller debt facilities.

Contura is a Bristol, Tenn.-based company with mining operations across multiple coal basins in Pennsylvania, Virginia, West Virginia and Wyoming.

Warrior Met sets talk

Warrior Met Coal held its bank meeting in the afternoon and, a few hours before the event kicked off, price talk was disclosed on its $350 million seven-year covenant-light first-lien term loan B (B3/B-), according to a market source.

The loan is talked at Libor plus 550 bps to 575 bps with a 1% Libor floor and an original issue discount of 99, the source said.

As previously reported, included in the term loan is 101 soft call protection for one year.

Commitments are due at 5 p.m. ET on March 9.

Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., Citigroup Global Markets Inc., BMO Capital Markets and RBC Capital Markets are leading the deal that will be used to fund a shareholder distribution.

Warrior Met Coal is a Brookwood, Ala.-based producer and exporter of metallurgical coal.

Cologix releases guidance

Cologix Holdings came out with price talk on its $300 million seven-year covenant-light first-lien term loan (B2/B+), $60 million 4.75-year delayed-draw for six months first-lien term loan (B2/B+) and $135 million eight-year covenant-light second-lien term loan (Caa2/B-) in connection with its bank meeting on Thursday, according to a market source.

The first-lien term loan is talked at Libor plus 350 bps to 375 bps with a 1% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, the delayed-draw term loan is talked at Libor plus 350 bps to 375 bps with a 0% Libor floor, a discount of 99.5 and 101 soft call protection for six months, and the second-lien term loan is talked at Libor plus 750 bps to 775 bps with a 1% Libor floor, a discount of 99 and hard call protection of 102 in year one and 101 in year two, the source said.

The delayed-draw loan has a first-lien net leverage covenant and a ticking fee of the full spread.

Cologix getting revolver

In addition to the first-and second-lien term loans, Cologix’s $570 million senior secured credit facility includes a $75 million revolver (B2/B+).

Commitments are due at 1 p.m. ET on March 9, the source added.

Barclays, TD Securities (USA) LLC and Jefferies Finance LLC are leading the deal that will be used to help fund the acquisition of Cologix by Stonepeak Infrastructure Partners. The existing Cologix investors, including Grant van Rooyen, the van Rooyen Group, company management, Columbia Capital and Greenspring Associates, will continue to hold a material interest in the company.

Closing is subject to regulatory approvals.

Cologix is a Denver-based data center and interconnection solutions provider.

Navico terms surface

Navico launched at its morning bank meeting its $260 million seven-year senior secured term loan B (B2/B) with talk of Libor plus 500 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 $285 million credit facility also includes a $25 million super senior revolver (Ba2).

Commitments are due on March 8, the source added.

Goldman Sachs Bank USA is leading the deal that will be used to refinance existing debt and fund cash to the balance sheet.

Navico is a manufacturer of marine electronics based in Egersund, Norway.

Trader Corp. launches

Trader Corp. came out with talk of Libor plus 325 bps with a 1% Libor floor, a par issue price and 101 soft call protection for six months on its $395 million first-lien term loan due September 2023 a few hours before its afternoon lender call began, a market source said.

Commitments are due at 4 p.m. ET on Wednesday, the source added.

Goldman Sachs Bank USA, J.P. Morgan Securities LLC and Macquarie Capital (USA) Inc. are leading the deal that will be used to reprice an existing first-lien term loan from Libor plus 400 bps with a 1% Libor floor.

Trader Corp. is an Etobicoke, Ont.-based digital automotive marketplace.

Internet comes to market

Internet Brands surfaced in the morning with plans to hold a lender call at 4 p.m. ET to launch a $300 million covenant-light incremental first-lien term loan (B1) due July 2021 that includes a $100 million delayed-draw tranche, according to a market source.

Talk on the incremental loan is Libor plus 375 bps with a leverage-based step-up to Libor plus 400 bps and a 1% Libor floor, in line with existing first-lien term loan pricing, an original issue discount of 99 to 99.5, 101 soft call protection for six months, and a ticking fee of the full spread plus the floor from days 31 to 180, and it will fund into escrow thereafter, the source said.

Commitments are due at 5 p.m. ET on March 3.

Credit Suisse Securities (USA) LLC, KKR Capital Markets LLC, RBC Capital Markets, Mizuho Bank Ltd. and Sumitomo Mitsui Bank Corp. are leading the deal that will fund cash to the balance sheet for future acquisitions.

Internet Brands is an El Segundo, Calif.-based provider of vertically focused online media and software services. The borrowers of the term loan are MH Sub I LLC and Micro Holding Corp.

Aspen Dental guidance

Aspen Dental held its lender call, launching its fungible $175 million add-on term loan B due April 30, 2022 with original issue discount talk of 99.75 to par, a market source said.

The add-on loan is priced at Libor plus 425 bps with a 25 bps step-down at less than 3.15 times first-lien net leverage and a 1% Libor floor, in line with existing term loan B pricing, and the debt is getting 101 soft call protection for six months, the source continued.

Commitments are due at noon ET on March 2.

RBC Capital Markets LLC is leading the deal that will be used to fund a dividend.

American Securities is the sponsor.

As part of this transaction, existing lenders are being offered a 25 bps amendment fee, the source added.

Including the add-on, the term loan B will total $619 million.

Aspen Dental is an East Syracuse, N.Y.-based dental support organization.

Caraustar readies loan

Caraustar Industries set a bank meeting for 10 a.m. ET in New York on Friday to launch an $860 million five-year covenant-light first-lien term loan (B+), according to a market source.

Talk on the term loan is Libor plus 600 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, the source said.

Commitments are due at 5 p.m. ET on March 9.

Credit Suisse Securities (USA) LLC is leading the deal, which will be used to refinance existing debt.

Caraustar is an Austell, Ga.-based manufacturer of recycled paperboard and converted paperboard products.

American Axle deadline

In other news, American Axle & Manufacturing Holdings Inc. disclosed in an 8-K filed with the Securities and Exchange Commission that the commitment deadline for its $2.45 billion senior secured credit facility (Ba2/BB/BB+) is March 8.

The facility, which launched with a bank meeting on Thursday, consists of an $800 million five-year revolver, a $100 million five-year term loan A and a $1.55 billion seven-year covenant-light term loan B.

As previously reported, the term loan B is talked at Libor plus 250 bps to 275 bps with a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

Incremental allowance is $600 million plus an additional amount such that pro forma first-lien net leverage is equal to or less than first-lien net leverage at closing.

Mandatory prepayments are 100% of proceeds from debt issuances other than permitted debt issuances, 100% of proceeds from asset sales and 50% of excess cash flow with step-downs to 25% and 0% based on total net leverage.

American Axle buying Metaldyne

Proceeds from American Axle’s credit facility, $1.2 billion in senior unsecured notes and $180 million in cash on hand will be used to fund the acquisition of Metaldyne Performance Group Inc. for about $1.6 billion in cash and stock, plus the assumption of $1.7 billion in net debt. Each share of Metaldyne’s common stock will be converted into the right to receive $13.50 per share in cash and 0.5 of a share of American Axle common stock.

J.P Morgan Securities LLC is leading the debt.

Closing is expected in the first half of this year, subject to shareholder and regulatory approval and other customary conditions.

Total net leverage is 3.1 times.

American Axle is a Detroit-based manufacturer and designer of driveline and drivetrain systems and related components and modules, chassis systems, electric drive systems and metal-formed products. Metaldyne is a Plymouth, Mich.-based provider of highly engineered lightweight components for use in powertrain and suspension applications for the vehicle markets.

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