66 International Financing Review February 29 2020SAIC provides engineering IT services
primarily to the US government, including
the Department of Defense. The company
was spun off from Leidos Holdings in
September 2013.
Unisys Federal provides cloud migration
and enterprise IT services to US government
agencies. The company is an operating unit
of Unisys.DUFF & PHELPS FLOATS TERMS#ORPORATEûlNANCIALûADVISERûDUFF & PHELPS
mOATEDûPRICEûGUIDANCEûFORûAûlNANCINGûPACKAGEû
that will back its acquisition by a global
investor consortium led by Stone Point Capital
and Further Global Capital Management.
4HEûDEBTûDEALûCOMPRISESûAû53BNûlRSTLIENû4ERMû,OANû"ûFACILITY ûAûõMûlRST
LIENû
TLB and a US$200m revolving credit facility.
Both the dollars and euros are being
offered at 350bp over Libor/Euribor with a
ûmOOR ûû/)$ûANDûûSOFTûCALLû
protection for six months.
The dollar and euro-denominated TLBs
have seven-year tenors.
Goldman Sachs, UBS, Bank of America, Morgan
Stanley, Stone Point Capital Markets, KKR Capital
Markets, CapitalOne and Credit Suisse are
arranging the transaction.
#ORPORATEûRATINGSûAREû""nûANDûTHEûlRST
lien debt is rated B2/B–.
Duff & Phelps agreed to be acquired by
the consortium of investors for US$4.2bn.
CAPSTONE LOGISTICS, a provider of
outsourced supply chain services, hasguided the terms of a US$395m Term Loan B
THATûWILLûRElNANCEûEXISTINGûDEBT
4HEûSEVEN
YEAR ûlRST
LIENû4,"ûISûBEINGû
offered at 450bp–475bp over Libor with a 0%
mOOR ûû/)$ûANDûûSOFT
CALLûPROTECTIONû
for six months.
Credit Suisse is leading the deal.
Capstone is also raising a US$75m
revolving credit facility and privately
placing a US$105m second-lien term loan,
according to Moody’s.
#ORPORATEûANDûlRST
LIENûRATINGSûAREû
B3/B–.
Adjusted debt to Ebitda is roughly 6.3
times, Moody’s said.
In October 2014, Capstone raised a
US$182.5m seven-year TLB at 450bp over
,IBORûWITHûAûûmOOR
The Jordan Company acquired the
company in August 2014.SNAPAV RELAUNCHES ADD-ONSNAPAV has relaunched a US$390m
incremental debt transaction to support the
company’s acquisition of Control4.
The transaction now comprises a
53MûlRST
LIENûTERMûLOANû"ûANDûAû
US$100m second-lien loan.
4HEûlRST
LIENûLOANûISûBEINGûOFFEREDûATû
BPûOVERû,IBORûWITHûAûûmOOR ûAû
û/)$û
and 101 soft-call protection until July 31.
SnapAV originally launched the deal in
*ULYûASûAû53MûlRST
LIENûINCREMENTALû4,"û
at 500bp over Libor and an OID of 99 but it
was postponed due to adverse market
conditions.
SnapAV will attach the non-fungible debt
to a TLB that matures in August 2024.
UBS, BMO Capital Markets and SunTrust are
arranging the deal.
SnapAV’s corporate rating is B3/B.
-OODYSûUPGRADEDû3NAP!6SûlRST
LIENûLOANû
to B2 from B3 after the company included the
SECOND
LIENûTRANCHEûINûTHEûlNANCINGû4HEû
53MûSECOND
LIENûLOANûCREATESûAûlRSTûLOSSû
absorption and reduces the total amount of
lRST
LIENûDEBT ûTHEûRATINGSûAGENCYûSAID
The debt-to-Ebitda ratio is roughly 8.2
times, but this is expected to decrease to less
than 7.0 times over the next 12 months,
Moody’s said.
The US$680m acquisition includes
US$247m in new equity from SnapAV’s
private equity sponsor Hellman & Friedman.
SnapAV manufactures and distributes
audio, video, networking, structured wiring
and surveillance products.
Pet food manufacturer CJ FOODS has
LAUNCHEDûAû53MûlRST
LIENûTERMûLOANû"û
that will support its acquisition of peer
American Nutrition.
The seven-year TLB is being offered at
BPûOVERû,IBORûWITHûAûûmOOR ûAûû/)$û
and 101 soft-call protection for six months.Borrowers warn virus outbreak
could impact earnings
US Loan market may remain quiet, especially for opportunistic dealsCompanies are warning that the fast-spreading
coronavirus could disrupt operations and cut into
earnings as the loan market feels the pinch from
a sell-off in equity markets.
Borrowers, including toy manufacturer HASBRO
and publisher HOUGHTON MIFFLIN HARCOURT
warned last week that production could be
impacted by a slowdown at manufacturers due
to the coronavirus.
Some opportunistic loan financings have been
pushed off amid the volatility, while the high-
yield bond market was in a holding pattern for all
of last week.
The most immediate economic impact is
expected in China, but the risk of a pandemic
could send ripples through financial markets
globally. The virus will likely have the largest
negative impact on goods and services sectors
that rely on Chinese consumers and intermediary
products, Moody’s said this month.
The Dow Jones Industrial Average fell more
than 11% last week. The LPC 100, a cohort of the
100 most liquid US loans, dropped 46bp last
week up to Wednesday.
The loan market tends to react slower than
equities. At least one trader said there was a bit
of a “buyers strike” early in the week as firms
sought to determine how best to position their
portfolio. Both the trader and a banker said firms
had cash they are willing to put to work at the
right price.
“The loan market is down half to one point
and this will eventually ripple into the primary
market,” the banker said.
The volume of loan deal launches was slower
with a few opportunistic financings put on hold.MANUFACTURING CONSTRAINTS
Hasbro said that while it had the manufacturing
capacity to meet expected demand this year, if
the company or its suppliers suffer prolonged
manufacturing disruptions due to public health
conditions such as coronavirus, its manufacturing
capacity could be adversely impacted.
Hasbro signed a US$1bn term loan in
September to partially fund its acquisition of
Entertainment One.
Disruption for toy companies, including
Hasbro, could extend into the second quarter if
the outbreak is not contained, S&P said.
Houghton Mifflin Harcourt, which refinanced
in November with a US$380m term loan, said
that an operational disruption to its business
from factors including coronavirus could restrict
its ability to supply products and services to
customers.
Home decor and furniture retailer PIER 1
IMPORTS, which filed for Chapter 11 on February
17, noted it could face a potential disruption of its
inventory due to the virus.
“While factories are beginning to reopen
in China, this will likely have some effect on
inventory levels for the foreseeable future,” CEO
Robert Riesbeck said in a court filing.
The loan asset class may remain quiet,
especially for opportunistic deals, until markets
seem more hospitable.
“Deals that have deadlines ... will have to wait
and see what the sentiment is next week,” the
banker said last week. “We wanted to launch
deals this week too, but now we’ve hit the pause
button.”
Kristen Haunss, Aaron Weinman9 IFR Loans 2322 p 55 - 72 .indd 66 28 / 02 / 2020 18 : 11 : 32