IFR - 07.07.2018

4HEûLOANûSOLDûATûAûû/)$ûASûPROPOSEDû
3OFTûCALLûPROTECTIONûATûûWASûEXTENDEDûTOû
ûMONTHSûFROMûSIXûINITIALLY
4HEûlRST
LIENûCREDITûFACILITYûALSOûINCLUDESû
Aû53MûlVE
YEARûREVOLVINGûCREDITûWHICHû
was guided at a spread of 325bp over Libor
WITHûAûûmOOR
4HEû-&.ûSUNSETûPROVISIONûWASûALSOû
eliminated and the company will hold
annual lender calls.
A US$125m eight-year second-lien term
loan was placed privately.
Marketing company VESTCOM
INTERNATIONAL pulled the repricing portion
of a proposed transaction but proceeded
with a US$90m add-on.
The new money will be used to back
a dividend. Antares Capital led. The
company also privately placed a
US$34m second-lien loan to support
the deal.
4HEûEXISTINGûlRST
LIENûLOANûTOTALLEDû
APPROXIMATELYû53M
The add-on priced in line with the
EXISTINGûLOANûATûBPûOVERû,IBORûWITHû
AûûmOORûANDûAûDISCOUNTûOFûû
Guidance went out at 375bp with a
ûmOORûANDûAûBPûLEVERAGE
BASEDû
stepdown.
The issuer is sponsored by private equity
lRMû#HARLESBANKû#APITALû0ARTNERS

STARS WRAPS ACQUISITION LOAN

(The information on The Stars Group
loan published in our June 30 issue was
incorrect.)
Canadian gaming and online gambling
company THE STARS GROUPûlNALISEDûTERMSûONû
June 28 for the US$4.565bn dual-currency
loan backing its US$4.7bn acquisition of
Sky Betting and Gaming from CVC Credit
Partners.
The covenant-lite transaction comprises
a US$3.575bn term loan B and an €850m
term loan B.
Stars dropped a proposed sterling-
denominated loan tranche and increased a
corresponding offering of 7% notes by
US$250m to US$1bn.
0RICINGûONûTHEûDOLLARûTRANCHEûlNALISEDûINû
line with guidance at 350bp over Libor
WITHûAûûmOORûANDûAûDISCOUNTûOFû
The euro tranche priced at 375bp over
%URIBORûWITHûAûûmOORûFROMûGUIDANCEûOFû
BPûOVERû%URIBORûWITHûAûûmOORû4HEû
discount was 99.5.
4HEûSEVEN
YEARûLOANûINCLUDESûSIXûMONTHSû
of soft call protection at 101.
Deutsche Bank led the term loan with
Morgan Stanley, Goldman Sachs, Macquarie,
Barclays, BMO and JP Morgan.
The corporate ratings are B2/B+/
B+, while the term loan B is rated B1/
B+/BB.

EUROPE/MIDDLE EAST/

AFRICA

MEHILAINEN INCREASES TLB PRICING

Private healthcare company MEHILAINEN

PRICEDûTHEûlRST

LIENûTERMûLOANû"ûWIDEûOFû

initial guidance.

The seven-year €760m TLB priced at

BPûOVERû%URIBORûWITHûAûûmOORûANDûAû

û/)$ûHAVINGûLAUNCHEDûATûBP

BP

The eight-year €200m second-lien term

loan priced at 750bp over Euribor with a

ûmOORûANDûAûû/)$ûATûTHEûHIGHERûENDûOFû

the initial guidance of 725bp-750bp.

The total €960m loan will be used to

FUNDûPRIVATEûEQUITYûlRMû#6#SûACQUISITIONû

of the Finnish company.

Lenders secured concessions on the

DOCUMENTSûFORûTHEûlNANCINGûPRIORûTOûCLOSEû

The changes include a tightening on the

margin ratchet holiday, most-favoured-

NATIONûEXCLUSIONSûANDûCONTRIBUTIONû

indebtedness.

Also included as part of the changes is a

tightening of the adjustments included in

THEû%BITDAûDElNITIONû20ûLEVELSû

investments, as well as ECF and second-

lien pre-payments.

The amendments followed demands

from investors for a greater tightening of

the documents.

/NûTHEûlRST

LIENûTHEREûISûûSOFTûCALLûFORû

SIXûMONTHSûWHILEûTHEûSECOND

LIENûISû

callable at 102, 101 and par.

4HEûlNANCINGûALSOûINCLUDESûAûõMû

revolving credit facility.

Corporate family rating for Mehilainen

ISû""û4HEûlRST

LIENûFACILITYûISûRATEDû""

B+, while the second-lien facility is CCC+/

Caa2.

CVC is buying a stake of around 50% in

Mehilainen at a €1.8bn valuation, while

Finnish mutual life insurance group

Lahitapiola and pension funds Varma and

Ilmarinen will increase their stakes to

more than 30% combined.

Bank of America Merrill Lynch, Barclays,

Credit Suisse, Danske Bank, Jefferies and Nordea

were joint bookrunners. MUFG, Standard

Chartered and SMBC were mandated lead

arrangers.

ALEXANDER MANN MARKETS £325m

DEAL

Talent acquisition and management

SERVICESûlRMûALEXANDER MANN SOLUTIONS is in

THEûMARKETûWITHûAûaMûLOANûTOûlNANCEû

the company’s £820m acquisition by

/-%23û0RIVATEû%QUITY

The seven-year bullet term loan B is

GUIDEDûATûBPûOVERû,IBORûWITHûAûûmOORû

ANDûAûû/)$

The covenant-lite facility includes 101

Rising pricing creates

challenges for big buyouts

„ US Investors able to call the shots for the first time since early 2016

Rising pricing is creating a more challenging

environment for large US buyout loans that

were underwritten earlier this year, including a

US$13.5bn loan and bond financing for THOMSON

REUTERS’ Finance and Risk unit and a US$8.05bn

financing for ENVISION HEALTHCARE.

A wave of new issuance in May and June has

given investors the upper hand with more deals

to choose from. This is creating a less predictable

market environment and pricing has widened out

to an average 400bp from 325bp as a result, a

banker said.

“For the first time in as long as I can remember

lenders have the opportunity to push back on

deals and get more spread ... more discount ...

more call protection on new deals,” a senior loan

investor said.

New money loans totalled US$33.5bn in June

and US$54.2bn in May, which was the biggest

monthly total since September 2017, when the

figure hit US$70bn.

Some deals are requiring revisions such

as higher pricing, more call protection and

documentation changes, while other transactions

are clearing the market easily, as investors focus

on credit fundamentals ahead of an anticipated

downturn as US interest rates rise and the

elongated credit cycle draws to an end.

“It’s all about credit quality at the end of

the day,” said a second loan investor. “We’re

looking closely at all the numbers on every deal

differently.”

Some opportunistic refinancing transactions,

including a US$1.5bn repricing for driveline

manufacturer American Axle & Manufacturing,

have been pulled recently as the market’s

attitude to risk grows more bearish amid

dislocation in the high-yield bond market.

“They (investors) are pushing back on

repricing. Everyone’s sick and tired of them and

don’t think that these should get done during a

choppy market,” the first loan investor said.