IFR - 07.07.2018

(Nancy Kaufman) #1

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.
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