IFR International - 28.07.2018

The Westinghouse acquisition was
announced in January and is valued at
53BNû"ROOKlELDû"USINESSû0ARTNERSû,0û
and institutional partners purchasing the
Pittsburgh-based business are kicking in
US$1bn of equity in addition to the debt.
7ESTINGHOUSEûISûAûUNITûOFû*APANSû4OSHIBAû
#ORP ûANDûlLEDûFORûBANKRUPTCYûINû-ARCHû
after billions of dollars in cost overruns at
two nuclear power plants it designed and is
CONSTRUCTINGûINû'EORGIAûANDû3OUTHû#AROLINA
4HEûBORROWERûISû"ROOKlELDû7%#û(OLDINGSû)NC
Payment technology provider VERIFONE
SYSTEMS INC set guidance on Wednesday on
US$2.2bn of loans backing its buyout by
PRIVATEûEQUITYûlRMû&RANCISCOû0ARTNERS
Credit Suisse is leading the deal with
Barclays and Royal Bank of Canada.
Commitments are due on August 8.
4HEûDEALûINCLUDESûAû53BNûlRST
LIENû
TERMûLOAN ûAû53MûSECOND
LIENûTERMûLOANû
and a US$250m revolving credit facility.
4HEûSEVEN
YEARûlRST
LIENûTERMûLOANûISû
expected to price in the 400bp–425bp over
,IBORûRANGEûWITHûAûûmOORûANDûAûDISCOUNTûOFû
99.5. The loan will have six months of soft
call protection.
Pricing on the eight-year second-lien term
loan is expected in the 800bp–825bp over
,IBORûRANGEûWITHûAûûmOORûANDûAûDISCOUNTûOFû

99. The tranche includes hard call protection
    of 102/101.
    4HEûISSUERûISûRATEDû""ûWHILEûTHEûlRST
    LIENû
    loan is rated B1/B and the second-lien loan is
    rated Caa1/B–.
    The buyout was announced on April 9 and
    CARRIESûANûENTERPRISEûVALUEûOFû53BN

DYNATRACE SETS GUIDANCE ON

US$1.18bn REFI

Application performance management

software company DYNATRACE has set

GUIDANCEûONûAû53BNûlRST

ûANDûSECOND

LIENûCREDITûFACILITYûTHATûRElNANCESûDEBT

4HEûCREDITûINCLUDESûAû53MûlVE

YEARû

REVOLVERûAû53MûSEVEN

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LIENû

term loan and a US$170m, eight-year

second-lien term loan.

4HEûlRST

LIENûTERMûLOANûISûGUIDEDûATûBPû

OVERû,IBORûWITHûAûûmOORûANDûISûOFFEREDûATûAû

99.5 original issue discount.

The second-lien term loan is guided at

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offered at a discount of 99.

#ALLûPROTECTIONûONûTHEûlRST

LIENûTRANCHEûISû

expected at 101 soft call for six months,

while the second-lien tranche is callable at

102 in year one, then at 101 in year two.

Jefferies is leading the bank syndicate. The

deal launched on Monday afternoon.

#OMMITMENTSûAREûDUEû!UGUSTû

$YNATRACEûISûBASEDûINû7ALTHAMû-!

ADVISOR GROUP INC has launched US$700m of

loans backing the acquisition of Signator

Investors Inc and a dividend

recapitalization.

Barclays LEADSûTHEûTRANSACTIONû,IGHTYEARû

#APITALûANDû030û)NVESTMENTSûAREûTHEûlNANCIALû

sponsors. Commitments are due August 9.

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YEARû

lRST

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YEARû

revolver.

'UIDANCEûOPENEDûINûTHEûBP

BPû

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discount of 99.5. The term loan will

have six months of soft call protection

at 101.

/Nû*UNEûû!DVISORû'ROUPûANNOUNCEDû

that it was acquiring Signator and planned

to merge it into Royal Alliance Associates

)NCûONEûOFû!DVISORû'ROUPSûFOURûEXISTINGû

INDEPENDENTûlRMS

Signator is a dual-registered broker-

dealer and investment advisor that counts

MOREûTHANûûlNANCIALûPROFESSIONALSû

and approximately US$50bn in client

assets and is part of John Hancock.

A lender meeting has been scheduled

FORû*ULYûûTOûLAUNCHû53BNûOFûLOANSû

backing the three-company merger of

software providers TRITECH SOFTWARE SYSTEMS

INC, SUPERION LLC and APTEAN SOFTWARE LLC.

4HEûDEALûINCLUDESûANû53MûlRST

LIENû

SEVEN

YEARûTERMûLOANûANDûAû53MûlVE

year revolving credit facility.

!û53MûSECOND

LIENûEIGHT

YEARûLOANû

supporting the merger has been privately

placed.

Antares Capital, Macquarie Capital and

SunTrust have underwritten the debt

backing the merger.

Tritech is backed by Bain Capital while

Superion and Aptean are sponsored by

6ISTATû%QUITYû0ARTNERSû4HEûCOMBINEDû

company will provide software for

municipalities and public safety agencies.

The merger was announced July 24.

AIS HOLDCO LAUNCHING US$450m

M&A LOAN

AIS HOLDCO is set to launch a US$450m credit

fa cility backing the acquisition of business

SERVICESûPLATFORMû!FlNIONû)NSURANCEû

Solutions by Mill Point Capital.

Jefferies leads the deal, which includes a

53MûREVOLVERûAû53MûSEVEN

YEARû

lRST

LIENûTERMûLOANûANDûAû53MûEIGHT

year second-lien term loan.

4HEûlRST

LIENûTERMûLOANûHASûûSOFTûCALLû

protection for six months, while the

second-lien tranche is callable at 102, 101.

Mill Point Capital, a middle market

PRIVATEûEQUITYûlRMûANDû!FlNIONû'ROUPû

,,#ûONû*ULYûûANNOUNCEDûTHATûTHEYûHADû

entered an agreement for Mill Point to

ACQUIREû!FlNIONû)NSURANCEû3OLUTIONSû!)3    û

The acquisition is expected to close in the

third quarter of 2018.

AIS is a business services platform with

expertise in the distribution, marketing and

administration of a broad range of

SIMPLIlEDûGUARANTEED

ISSUEûINSURANCEû

products.

Retirement services provider NEWPORT

GROUPûISûREADYINGû53MûINûlRST

LIENû

credit facilities for launch.

RBC Capital Markets, SunTrust, Capital One

and Fifth Third are joint lead arrangers.

Loan protections hit weakest

level on record

„ LEVERAGED LOANS Conditions continue to favour borrowers

Protections for loan lenders hit their

weakest level ever as conditions continue to

favour borrowers in the US$1trn US leveraged

loan market, according to Moody’s Investors

Service.

The Loan Covenant Quality Indicator (LCQI)

dropped to 4.12 in the first quarter of 2018 from

4.00 in the fourth quarter of 2017, according to a

report from the ratings firm.

LCQI is a two-quarter rolling average of loan

covenant quality scores that Moody’s uses to

measure covenant protections in the syndicated

leveraged loan market.

The index runs from 1, which is the strongest

ranking, to 5, which is the weakest. The previous

worst grade was 4.1 set in the third quarter last

year.

“Protections remain distressingly weak on

average,” analysts at the ratings firm wrote in

the report, adding “investors should remain

wary given the risks presented by most loan

documents and the likelihood that any steadying

of covenant protection is temporary.”

Some loan terms give borrowers the ability to

move or sell collateral, which can hurt investors,

according to the report.

Moody’s said the ability for large unrestricted

subsidiary asset transfers and weak mandatory

prepayment provisions that allow companies to sell

collateral without using the proceeds to repay loans

“challenge the fundamental notion that collateral

will be available to backstop a loan and provide some

minimum recovery value in a bankruptcy scenario.”

Kristen Haunss