Signant Health breaks; First Student dips with downgrade; Copeland updates pricing

By Sara Rosenberg

New York, May 3 – Signant Health (Bracket Intermediate Holding Corp.) modified the original issue discount on its first-lien term loan and made some changes to documentation, and then the debt freed to trade on Wednesday.

Also, First Student (First Student Bidco Inc.) saw its strip of term loan B and term loan C soften in the secondary market after Moody’s Investors Service trimmed the company’s ratings.

In more happenings, Copeland trimmed the spread on its term loan B, Aventiv Technologies LLC and AL NGPL Holdings LLC released price talk with launch, and Ryman Hospitality Properties (RHP Hotel Properties LP) joined this week’s primary calendar.

Signant tweaked

Signant Health adjusted the original issue discount on its $980 million five-year first-lien term loan to 97 from 96.5 and made some lender friendly documentation revisions, according to a market source.

As before, the term loan is priced at SOFR+10 basis points CSA plus 500 bps with one 25 bps leverage-based step-down and a 0.5% floor, and has 101 soft call protection for six months.

Previously in syndication, the company upsized the funded term loan from $850 million, and terminated plans for a $130 million delayed-draw first-lien term loan that was going to be available for six months and had ticking fees of half the margin for days 46 to 90 and the full margin thereafter.

The change to the structure was made due to operational dynamics with cashless rolling into a delayed-draw term loan.

The company’s $1.06 billion of credit facilities (B3/B-) also include an $80 million revolver.

Signant hits secondary

Recommitments for Signant Health’s term loan were due at 1 p.m. ET on Wednesday and the debt broke for trading in the afternoon, with levels quoted at 97¼ bid, 98 offered, a trader added.

Jefferies LLC, Antares Capital and Golub are leading the deal.

The term loan will be used to refinance the company’s existing debt. In addition, in place of the initially proposed delayed-draw term loan, the company will place $130 million of the term loan in a segregated account at close, for the purpose of a near-term potential acquisition under a letter of intent. If the acquisition does not close, the company will have six months from the closing date to use the funds on another acquisition or can repay it in full.

Signant is a Blue Bell, Pa., provider of clinical research technology and solutions for clinical trials.

First Student slides

First Student’s strip of Libor plus 300 bps term loan B and term loan C debt fell to 93 bid, 94 offered on Wednesday from 94½ bid, 95½ offered on Tuesday following a ratings downgrade from Moody’s, a trader remarked.

Moody’s cut the company’s corporate family rating, senior secured bank credit facilities and senior secured global notes to B1 from Ba3. The outlook is stable.

Moody’s said that the ratings downgrade reflects the company’s inability to deleverage since the July 2022 acquisition of Total Transportation. Moody’s estimates First Student’s adjusted debt/EBITDA, pro forma for recent acquisitions and the First Transit divestiture, to be around 6x at Dec. 24, 2022. Moody’s projects that First Student’s adjusted debt/EBITDA will decline to around 5.5x for the fiscal year ending June 29, 2024.

First Student is a Cincinnati-based provider of student transportation services.

Spectrum Plastics rises

Spectrum Plastics Group’s term loans were stronger following news that the company is being acquired by DuPont, a market source said.

The company’s first-lien term loan was quoted at 99¾ bid, par offered, up from 96 bid, 98 offered prior to the announcement, and the second-lien term loan was quoted at 99¾ bid, par 1/8 offered, up from 95 bid, 97 offered prior to the announcement, the source added.

On Tuesday, DuPont announced that it entered into a definitive agreement to acquire Spectrum Plastics from AEA Investors for $1.75 billion, and will fund the purchase using existing cash balances.

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

Spectrum Plastics is an Atlanta-based designer, developer and manufacturer of highly engineered polymer-based solutions used in medical and other specialty end-markets.

Copeland cuts spread

Back in the primary market, Copeland lowered pricing on its up to $2.75 billion seven-year term loan B (Ba3/BB-/BB+) to SOFR plus 300 bps from SOFR plus 350 bps, and left the 0% floor, original issue discount of 99 and 101 soft call protection for six months unchanged, according to a market source.

Commitments continue to be due at noon ET on Thursday, the source added.

RBC Capital Markets, Barclays, Wells Fargo Securities LLC, SMBC, Goldman Sachs Bank USA, BNP Paribas Securities Corp., HSBC Securities (USA) Inc., JPMorgan Chase Bank, Mizuho, Truist, BofA Securities Inc., MUFG, Bank of Nova Scotia, TD Securities (USA) LLC, CIBC, Regions, Fifth Third and US Bank are leading the deal that will be used with $2.25 billion of senior secured notes and $500 million equivalent euro senior secured notes to help fund the acquisition by Blackstone of a majority stake in Emerson Electric Co.’s Climate Technologies business (Copeland) for an aggregate purchase price of $14 billion.

Under the agreement, Emerson will receive upfront, pre-tax cash proceeds of about $9.5 billion and a note of $2.25 billion at close and retain 45% common equity ownership in the new stand-alone joint venture.

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

Copeland is a manufacturer of heating, ventilation, air conditioning and refrigeration components.

Aventiv guidance

Aventiv Technologies held its lender call on Wednesday morning and announced price talk on its $700 million four-year covenant-lite term loan B (B3/B-) at SOFR plus 600 bps with a 0.5% floor and an original issue discount of 97, a market source remarked.

The term loan has 101 soft call protection for one year and no CSA.

Commitments are due at noon ET on May 12.

Deutsche Bank Securities Inc. is the left lead on the deal that will be used with $400 million of senior secured notes to refinance the company’s existing debt.

Aventiv is a Dallas-based technology platform provider enabling the delivery of mission critical solutions to correctional facilities, government agencies, incarcerated individuals, and their friends & family members during- and post-incarceration.

AL NGPL launches

AL NGPL Holdings launched a fungible $90 million incremental first-lien term loan due April 2028 talked at SOFR+CSA plus 375 bps with a 1% floor and an original issue discount of 99.03, according to a market source.

CSA is of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

Jefferies LLC is leading the deal that will be used to fund a distribution.

With this transaction, the company is seeking an amendment to its existing first-lien term loan to move pricing to SOFR+CSA plus 375 bps with a 1% floor from Libor plus 375 bps with a 1% floor, and permit the incremental term loan and distribution, the source continued.

Lenders are being offered a 25 bps amendment fee.

Commitments and consents are due at noon ET on Friday, the source added.

AL NGPL, an ArcLight Capital Partners portfolio company, is a provider of natural gas transportation and storage services.

Ryman readies deal

Ryman Hospitality Properties set a lender call for 2 p.m. ET on Thursday to launch a $375 million seven-year covenant-lite term loan B, a market source remarked.

Commitments are due at noon ET on May 10, the source added.

Wells Fargo Securities LLC, BofA Securities Inc., Deutsche Bank Securities Inc., JPMorgan Chase Bank and US Bank are leading the deal that will be used to refinance an existing term loan B.

Ryman is a Nashville, Tenn.-based real estate investment trust that owns and operates a portfolio of large, group-oriented hotels in urban and resort markets.

Fund flows

In other news, actively managed loan fund flows on Tuesday were negative $134 million and loan ETFs were negative $9 million, market sources said.

Leveraged loan funds are tracking their lightest outflows since November, sources added.

Loan indices soften

IHS Markit’s iBoxx loan indices were weaker on Tuesday, with the Leveraged Loan indexes (MiLLi) closing out the day down 0.02% and the Liquid Leveraged Loan indices (LLLi) closing out the day down 0.08%.

Month to date, the MiLLi is down 0.04% and year to date it is up 4.02%, and the LLLi is down 0.16% month to date and up 4.29% year to date.

Average secondary market bids in the U.S. on Tuesday were 91.47, down 0.07% from the previous day and down 0.45% year to date.

According to the IHS Markit data, some of the top advancers on Tuesday were Envision Healthcare/Amsurg’s July 2022 first-out covenant-lite term loan at 78.75, up from 71, Checkers Drive-In’s April 2017 term loan at 55.67, up from 53.33, and Panther Purchaser’s January 2021 term loan at 97.17, up from 93.17.

Some top decliners on Tuesday were U.S. Renal Care’s June 2019 term loan B at 63, down from 66.5, Planet Fitness/United PF’s December 2019 covenant-lite term loan at 76, down from 79.1, and iQor’s November 2020 second-out covenant-lite PIK term loan at 68.33, down from 70.5.

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