The revolver is governed by a springing
leverage covenant and the term loan is
covenant-lite.
)Nû û-ARKETOûARRANGEDûAû53Mû
term loan and a US$25m revolving credit
facility to back its buyout by private equity
lRMû6ISTAû%QUITYû0ARTNERSû'OLUBûWASû
administrative agent on that deal, which
priced at 950bp over Libor.
Healthcare company VIZIENT launched the
repricing of its US$1.05bn term loan due in
February 2023. Barclays leads the deal.
'UIDANCEûOPENEDûATûBPûOVERû,IBORû
WITHûAûûmOORûANDûAûDISCOUNTûOFûû4HEû
deal includes six months of soft call
protection at 101.
Vizient lowered the spread on the term
LOANûTOûBPûOVERû,IBORûINû!PRILûûFROMû
400bp over Libor, where it was repriced in
October 2016. The deal originally priced at
525bp over Libor in February 2016.
The term loan B totalled US$1.122bn last
April at its last repricing, and the company
is paying down additional funds with
proceeds from a pro rata transaction.
VISTAGE SEEKS LBO LOANS3UBSCRIPTION
BASEDû#%/ûADVISORYûlRMû
VISTAGE WORLDWIDE is in the market with a
lRSTûANDûSECOND
LIENûLOANûPACKAGEûBACKINGû
its buyout by Providence Equity Partners.
Macquarie Capital LEADSûTHEûlNANCING ûWHICHû
COMPRISESûAû53MûlVE
YEARûREVOLVINGûCREDITû
facility, a US$260m seven-year TLB and a
US$100m eight-year second-lien term loan.
Guidance on the TLB is 400bp over Libor
WITHûAûûmOORûANDûûDISCOUNTû4HEû
second-lien is guided at 800bp over Libor
WITHûAûmOORûANDûûDISCOUNT
The TLB will be offered with six months
of soft call protection at 101, while the
second-lien tranche will feature 102/101
hard call protection.
The revolving credit facility will be
undrawn at close.
,EVERAGEûISûûTIMESûTHROUGHûTHEûlRSTûLIENû
and 6.5 times total, based on roughly
53MûOFûLASTûûMONTHSûADJUSTEDûCASHû
Ebitda at November 30.
Providence is acquiring the company
from Tower Brook Capital Partners for
US$635m. The new sponsor is contributing
US$294m of equity.
Funds will be used to pay for the
acquisition, cover fees and expenses and add
cash to the balance sheet.
Software developer FLEXERA launched a
53MûlRSTûANDûSECOND
LIENûCREDITûFACILITY
Jefferies is arranging the transaction, with
Barclays and Bank of America Merrill Lynch.
4HEûFUNDINGûCOMPRISESûAû53MûlVE
year revolver, a US$525m seven-year
lRST
LIENûTERMûLOANûANDûAû53MûEIGHT
year second-lien term loan.
Proceeds from the credit, together with a
new cash equity investment from TA
!SSOCIATES ûWILLûBEûUSEDûTOûRElNANCEûEXISTINGû
debt and fund the purchase of a minority
stake in the company by TA.
4HEûlRST
LIENûISûGUIDEDûATûBP
BPû
OVERû,IBORûWITHûAûû,IBORûmOORû4HEûLOANûISû
offered at a 99.5 OID and has 101 soft call
protection for six months.
4HEûSECOND
LIENûISûGUIDEDûATûBP
BPû
OVERû,IBORûWITHûAûûmOORû!ûDISCOUNTûOFûûISû
offered and the loan is callable at 102 in year
one, then at 101 in year two.
Ontario Teachers’ Pension Plan will
REMAINûTHEûMAJORITYûOWNERû4HEûlRMûBOUGHTû
AûMAJORITYûSTAKEûINûTHEûCOMPANYûINû/CTOBERû
2011.
Vehicle safety company SAFE FLEET HOLDINGS
CIRCULATEDûPRICEûTALKûONûTHEûlRSTûANDûSECOND
lien loan package backing its LBO by Oak
Hill Partners.
Goldman Sachs leads with UBS and Morgan
Stanley.
4HEûlNANCINGûCOMPRISESûAû53MûlVE
year revolver, a US$410m seven-year
lRST
LIENûTERMûLOANûANDûAû53MûEIGHT
year second-lien term loan.
4HEûlRST
LIENûISûGUIDEDûATûBPûOVERû,IBORû
WITHûAûûmOORûANDûû/)$ ûWHILEûTHEûSECOND
LIENûISûGUIDEDûATûBPûOVERû,IBORû
WITHûAûûmOORûANDûû/)$
,EVERAGEûISûûTIMESûTHROUGHûTHEûlRSTûLIENû
ANDûûTIMESûTOTAL ûBASEDûONû53MûOFûLASTû
ûMONTHSûPROûFORMAûADJUSTEDû%BITDAûATû
/CTOBERû
Oak Hill is acquiring the company for
US$915m from The Sterling Group. The
PRIVATEûEQUITYûlRMûISûCONTRIBUTINGû53Mû
of equity to capitalisation.PHOENIX SEEKS US$530m LBO DEALSteel mill services company PHOENIX SERVICES
INTERNATIONAL has launched a US$530m loan
SUPPORTINGûITSûBUYOUTûBYûPRIVATEûEQUITYûlRMû
Apollo Global Management.
Barclays is leading with Credit Suisse,
Deutsche Bank and Royal Bank of Canada.
The deal comprises a US$465m seven-year
term loan and a US$65m revolving credit
facility.
Guidance opened at 450bp over Libor
WITHûAûûmOORûANDûAûDISCOUNTûOFûû4HEû
term loan will have six months of soft call
protection at 101.
Occupational medicine and urgent care
service provider CONCENTRA is in the market
with a US$555m add-on to its US$619m TLBLOANS LEVERAGED LOANSDefaults and spreads set to rise
GLOBAL IACPM says increase as central banks stop injecting liquidityCorporate debt defaults and credit spreads will
accelerate globally, as central banks become
less accommodative and boost interest rates,
according to a survey by the International
Association of Credit Portfolio Managers.
Central banks have kept interest rates and
defaults at record lows for almost a decade, but
economic improvement and signs of emerging
inflation pressures will turn the tide.
“Interest rates and credit defaults can only
go in one direction from here,” Som-lok Leung,
IACPM’s executive director, said.
“When central banks stop injecting liquidity
into the financial markets, rates and defaults will
go up. They have nowhere else to go.”
In the US, the Federal Reserve is expected
to raise rates three times this year. Two-year
Treasury yields, the maturity most sensitive to
interest rates hikes by the Fed, hit a nine-year
high on Wednesday.
IACPM’s 12-month credit default outlook index
improved to negative 30.3 in the fourth quarter
of 2017 from negative 36.3 the prior quarter.
Negative numbers, however, remain across all
regions, indicating expected credit erosion with
wider spreads and increased defaults.
The least negative outlook is in Europe, where
the central bank remains accommodative.The view on Europe’s corporate defaults
“reflects the ongoing quantitative easing
programme as the ECB continues to pump
liquidity into Europe’s financial system,” IACPM
said.
While the default outlook index scores are
negative 26.5 for North America, negative 42.1
for Asia and negative 29.4 for Australia, Europe
is relatively neutral at negative 8.8 for the next
12 months.
The group’s credit spread outlook deteriorated
in the latest survey, dragged down by concerns
about how the US tax system overhaul signed
into law in December 2017 will impact highly
indebted companies.
“Tax reform will clearly benefit much of the
corporate sector but we could see wider spreads
in US high-yield markets, if the deductibility of
interest payments is significantly limited,” said
Leung.
IACPM’s three-month credit spread outlook
index eroded to a negative 22.0 reading from
negative 18.8 the prior quarter. It is the most
negative reading since negative 27.3 in the fourth
quarter of 2016.
IACPM is an association of more than 90
financial institutions in more than 20 countries.
Lynn Adler