Carestream, AMG, Pelican, Draslovka, Fender break; Covanta, Brooks Automation changes emerge

By Sara Rosenberg

New York, Nov. 16 – Carestream Dental Equipment Inc. firmed pricing on its incremental first-lien term loan at the high end of talk, and AMG Advanced Metallurgical Group NV finalized the spread and issue price on its term loan B at the wide side of guidance, and then these deals freed to trade on Tuesday.

Also, before breaking for trading, Pelican Products Inc. set pricing on its first-lien term loan at the low end of talk, Draslovka Holding (Manchester Acquisition Sub LLC) revised the size and the original issue discount of its term loan, and Fender Musical Instruments Corp. upsized its term loan, trimmed the spread and changed the issue price.

In other news, Covanta Holding Corp. lowered pricing and revised the original issue discount on its term loans, and Brooks Automation Inc. (Altar BidCo Inc.) increased the size of its first-lien term loan, and trimmed spreads on its first- and second-lien tranches.

Additionally, Ascend Learning LLC, Kraton Corp. and Ascensus accelerated the commitment deadlines for their term loan transactions.

Furthermore, Davis-Standard and Duly Health & Care (Midwest Physician Administrative Services LLC) released price talk with launch, and Digi International and Solmax joined this week’s primary calendar.

Carestream sets terms

Carestream Dental finalized the spread on its non-fungible $335 million incremental covenant-lite first-lien term loan (B2/B) due September 2024 at Libor plus 450 basis points, the high end of the Libor plus 425 bps to 450 bps talk, a market source said.

The first-lien term loan still has a 0.5% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

The company is also getting a non-fungible $160 million incremental covenant-lite second-lien term loan (Caa2/CCC+) due September 2025 priced at Libor plus 800 bps with a 1% Libor floor and an original issue discount of 98.5. This tranche has call protection of 102 in year one and 101 in year two.

Last week, the first-lien term loan was scaled back from $695 million and revised to an incremental term loan coterminous with the existing first-lien loan from a term loan with a seven-year maturity. At that time, the company also reduced its second-lien term loan size from $260 million, firmed pricing at the high end of the Libor plus 775 bps to 800 bps talk, lifted the Libor floor from 0.5%, and modified the loan to an incremental term loan coterminous with the existing second-lien loan from a term loan with an eight-year maturity.

Carestream hits secondary

During the session, Carestream Dental’s bank debt freed to trade, with the incremental first-lien term loan quoted at 99½ bid, par offered and the incremental second-lien term loan quoted at 99½ bid, par ½ offered, another source added.

Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Goldman Sachs Bank USA, HSBC Securities (USA) Inc. and ING are leading the deal that will be used to fund a distribution to shareholders.

The recent downsizing of the term loans led the company to cancel plans to repay existing debt with the transaction.

Carestream Dental is an Atlanta-based dental technology company providing imaging equipment and practice management software.

AMG updated, trades

AMG Advanced firmed pricing on its $350 million seven-year term loan B at Libor plus 350 bps, the high end of the Libor plus 325 bps to 350 bps talk, and finalized the original issue discount at 99, the wide end of the 99 to 99.5 talk, according to a market source.

The 0.5% Libor floor and 101 soft call protection for six months on the term loan B were unchanged.

The company’s $550 million of credit facilities (Ba3/BB-) also include a $200 million five-year revolver.

On Tuesday, the term loan B broke for trading, with levels quoted at 99¼ bid, 99¾ offered, another source added.

HSBC Securities (USA) Inc. is the left lead on the deal that will be used to refinance existing credit facilities.

AMG Advanced, which has corporate offices in Amsterdam and Wayne, Pa., is a critical materials company that sources, processes, and supplies specialty metals and mineral products, and provides related vacuum furnace systems and heat treatment services.

Pelican finalizes, frees

Pelican Products set the spread on its $525 million seven-year first-lien term loan (B2/B) at Libor plus 425 bps, the low end of the Libor plus 425 bps to 450 bps talk, a market source said.

As before, the term loan has a 0.5% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

The term loan began trading during market hours, with levels quoted at 99 5/8 bid, par offered, another source added.

BofA Securities Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., Houlihan Lokey, Ares and Goldman Sachs Bank USA are leading the deal that will be used to help fund the buyout of the company by Platinum Equity.

Closing is expected by the end of the fourth quarter.

Pelican Products is a Torrance, Calif.-based designer and manufacturer of high-performance protective cases and rugged gear for professionals and outdoor enthusiasts, and temperature-controlled supply chain solutions for the health care industry.

Draslovka modified

Draslovka upsized its five-year term loan B to $348 million from $335 million, and changed the original issue discount to 94.5 from revised talk of 94 and initial talk of 98, a market source remarked.

Pricing on the term loan is SOFR+CSA plus 575 bps with a 0.75% SOFR+CSA floor. CSA is 10 bps one-month rate, 15 bps three-month rate and 25 bps six-month rate. The debt is non-callable for two years, then at 50% of the yield in year three and 25% of the yield in year four.

Previously in syndication, pricing on the term loan was lifted from talk in the range of SOFR+CSA plus 525 bps to 550 bps, the call protection was revised from a 101 soft call for one year, the maturity was shortened from seven years, a maintenance covenant was added, amortization was added, MFN was revised to 50 bps for life, and changes were made to, among other things, incremental debt, excess cash flow sweep and restricted payments.

Draslovka breaks

Draslovka’s term loan B made its way into the secondary market after terms finalized, and the debt was quoted at 95½ bid, another source added.

JPMorgan Chase Bank is leading the deal that will be used to help fund the $520 million acquisition of the Mining Solutions business of Chemours Co., and the upsizing will pay additional fees and expenses.

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

Draslovka is a Czech-based specialty chemicals company.

Fender revised, trades

Fender Musical Instruments increased its seven-year term loan (B) to $400 million from $375 million, reduced pricing to SOFR+CSA plus 400 bps from talk in the range of SOFR+CSA plus 425 bps to 450 bps and modified the original issue discount to 99.5 from 99, according to a market source.

The term loan still has a SOFR+CSA floor of 0.5%, CSA of 10 bps one-month rate, 15 bps three-month rate and 25 bps six-month rate, and 101 soft call protection for six months.

Recommitments were due at noon ET on Tuesday and the term loan broke for trading later in the day, with levels quoted at 99 7/8 bid, par 3/8 offered, another source added.

JPMorgan Chase Bank is leading the deal that will be used to help fund the acquisition of PreSonus Audio Electronics Inc., to repay a roughly $200 million term loan and, due to the upsizing, for general corporate purposes.

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

Fender is a Scottsdale, Ariz.-based musical instrument manufacturer. PreSonus is a Baton Rouge, La.-based designer and manufacturer of recording and live-sound hardware and software solutions.

Covanta tightens

Covanta trimmed pricing on its $1.335 billion seven-year sustainability linked term loan B and $100 million seven-year sustainability linked term loan C to Libor plus 250 bps from Libor plus 275 bps and moved the original issue discount on the loans to 99.75 from 99.5, according to a market source.

As before, the term loans (Ba1) have a 0.5% Libor floor, a 12.5 bps coupon increase for each of the two KPIs not met by the observation date of Dec. 31, 2025, and 101 soft call protection for six months.

Recommitments were due at 3 p.m. ET on Tuesday, the source added.

Barclays is the left lead on the deal that will be used with $300 million of sustainability-linked notes to help fund the buyout of the company by EQT Infrastructure for $20.25 per share and refinance existing debt.

Closing is expected in the fourth quarter, subject to Covanta shareholder approval and customary government approvals.

Covanta is a Morristown, N.J.-based provider of sustainable waste and energy solutions.

Brooks reworked

Brooks Automation raised its seven-year first-lien term loan to $900 million from $825 million, cut pricing to Libor plus 325 bps from Libor plus 375 bps, added a 25 bps step-down at 4x first-lien net leverage and removed a step-down upon an initial public offering, a market source said.

The company also reduced pricing on its $205 million eight-year second-lien term loan to Libor plus 550 bps from talk in the range of Libor plus 625 bps to 650 bps, the source continued.

The first-lien term loan still has a 0.5% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, and the second-lien term loan still has a 0.5% Libor floor, a discount of 99 and hard call protection of 102 in year one and 101 in year two.

Ticking fees on the term loans were unchanged at half the margin from days 46 to 90 and the full margin thereafter.

Recommitments were due at 5 p.m. ET on Tuesday, the source added.

Brooks lead banks

Barclays, Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., UBS Investment Bank, MUFG, SMBC and Stifel are leading Brooks Automation’s debt, with Barclays the left lead and administrative agent on the first-lien term loan, and Goldman the left lead and agent on the second-lien term loan.

The loans will be used with equity to fund the buyout of the company by Thomas H. Lee Partners LP in a transaction valued at $3 billion. The amount of equity being used was reduced due to the first-lien term loan upsizing.

Closing is expected in the first half of 2022, subject to customary conditions and regulatory approvals.

Brooks Automation is a Chelmsford, Mass.-based automation technology company with significant expertise in semiconductors.

Ascend Learning accelerated

Ascend Learning moved up the commitment deadline for its $2.005 billion seven-year first-lien term loan (B2/B-) and $755 million eight-year second-lien term loan (Caa2/CCC) to 5 p.m. ET on Wednesday from noon ET on Thursday, according to a market source.

The first-lien term loan is talked at Libor plus 350 bps to 375 bps with a 0.5% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, and the second-lien term loan is talked at Libor plus 600 bps with a 0.5% Libor floor, a discount of 99 and hard call protection of 102 in year one and 101 in year two.

Barclays and Goldman Sachs Bank USA are leading the deal, with Barclays the left lead and agent on the first-lien term loan and Goldman the left lead and agent on the second-lien term loan.

Proceeds will be used to refinance the company’s existing capital structure and fund a distribution to shareholders.

Ascend Learning is a provider of educational content, software and analytics solutions.

Kraton tweaks timing

Kraton accelerated the commitment deadline for its $950 million equivalent U.S. and euro seven-year term loan B (Ba3/BB) to noon ET on Wednesday from noon ET on Thursday, a market source said.

Talk on the U.S. term loan is Libor plus 350 bps to 375 bps with a 0.5% Libor floor and an original issue discount of 99.5, and talk on the euro term loan is Euribor plus 350 bps to 375 bps with a 0% floor and a discount of 99.5. Both term loans have 101 soft call protection for six months, and ticking fees of half the margin from days 46 to 90 and the full margin thereafter.

The U.S. and euro term loan B sizes are still to be determined, but the expectation is for a roughly €300 million euro tranche.

Goldman Sachs, BMO Capital Markets, Deutsche Bank Securities Inc., HSBC Securities, Wells Fargo Securities LLC, BNP Paribas Securities Corp., SMBC, BofA Securities Inc. and Mizuho are leading the deal.

Kraton being acquired

Proceeds from Kraton’s term loan debt will be used to help fund its acquisition by DL Chemical Co. Ltd. for $46.50 per share. The transaction has an enterprise value of about $2.5 billion.

Closing is expected in the first half of 2022, subject to customary conditions, including the receipt of stockholder and regulatory approvals.

Kraton is a Houston-based producer of specialty polymers and high-value bio-based products derived from pine wood pulping co-products. DL Chemical is a Korea-based petrochemical company.

Ascensus moves deadline

Ascensus accelerated the commitment deadline for its fungible $750 million incremental first-lien term loan B (B2/B-) due August 2028 and fungible $100 million incremental second-lien term loan (Caa2/CCC) due August 2029 to 2 p.m. ET on Wednesday from 5 p.m. ET on Thursday, according to a market source.

The incremental first-lien term loan is talked with an original issue discount of 99 to 99.5, and the incremental second-lien term loan is talked with a discount of 99.5.

Pricing on the incremental first-lien term loan is Libor plus 350 basis points with a 0.5% Libor floor and pricing on the incremental second-lien term loan is Libor plus 650 bps with a 0.5% Libor floor, in line with pricing on the existing term loans.

The incremental first-lien term loan has 101 soft call protection through February 2022, and the incremental second-lien term loan has call protection of 102 through August 2022 and 101 through August 2023.

Ticking fees on the incremental first-lien term loan are half the margin from days 46 to 90 and the full margin thereafter.

Ascensus buying Newport

Ascensus will use the incremental term loans to help fund its acquisition of Newport Group, a Walnut Creek, Calif.-based retirement services provider.

Goldman Sachs Bank USA, Stone Point, KKR Capital Markets LLC, Barclays, BofA Securities Inc., Capital One, Truist, Ares and Golub are leading the debt.

Closing is expected in the first quarter of 2022, subject to regulatory approvals and other customary conditions.

Ascensus is a Dresher, Pa.-based tech-enabled solutions provider focused on recordkeeping and administration in the U.S. tax advantages savings market.

Davis-Standard talk

Davis-Standard held its lender call on Tuesday morning and announced talk on its $285 million seven-year covenant-lite first-lien term loan B (B2/B) at Libor plus 500 bps to 525 bps with a 0.5% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, according to a market source.

Commitments are due on Dec. 3, the source added.

BMO Capital Markets and Stifel are leading the deal that will be used to help fund the buyout of the company by Gamut Capital.

Davis-Standard is a Pawcatuck, Conn.-based designer, developer and distributor of extrusion and converting technology.

Duly OID guidance

Duly Health & Care came out with original issue discount talk of 99.5 on its fungible $40 million incremental covenant-lite first-lien term loan due March 2028 shortly before its afternoon lender call began, a market source remarked.

Pricing on the incremental term loan is Libor plus 325 bps with a 0.75% Libor floor, in line with existing term loan pricing.

Commitments are due at 5 p.m. ET on Thursday.

Credit Suisse Securities (USA) LLC is leading the deal that will be used to fund tuck-in acquisitions.

Duly Health, formerly known as DuPage Medical Group, is a Downers Grove, Ill.-based multi-specialty physician group.

Digi readies deal

Digi International set a lender call for 11 a.m. ET on Wednesday to launch a $350 million term loan B, according to a market source.

BMO Capital Markets is leading the deal that will be used to fund the recently completed $347.4 million acquisition of Ventus Holdings, a Connecticut-based managed network as a service solutions provider, and to repay debt.

Digi is a Hopkins, Minn.-based provider of internet of things connectivity products and services.

Solmax on deck

Solmax will hold a lender call at 11 a.m. ET on Wednesday to launch a fungible $100 million incremental first-lien term loan due July 23, 2028, a market source said.

Pricing on the incremental term loan is Libor plus 475 bps with a 0.75% Libor floor, in line with existing term loan pricing.

Original issue discount talk on the incremental term loan is not yet available.

Barclays and TD Securities (USA) LLC are leading the deal that will be used to fund the acquisition of Propex.

Solmax is a Quebec-based producer of geosynthetics products for industrial and environmental applications.

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