Avago $4.6B loan backing LSI acquisition enters secondary north of issue price

avago-technologies_200x200Accounts this afternoon received allocations of the covenant-lite $4.6 billion B term loan for Avago Technologies, which broke for trading at 100/100.5, from issuance at 99.5, according to sources. The seven-year loan is priced at L+300, with a 0.75% LIBOR floor. Deutsche Bank, Barclays, Bank of America Merrill Lynch, and Citigroup arranged the loan, which cleared tight to original talk. The publicly traded semiconductor manufacturer will use proceeds to support its $6.6 billion acquisition of LSI Corp. The senior secured financing also includes a $500 million revolver, while Avago is also planning to fund the deal with a $1 billion investment from Silver Lake Partners, which would be in the form of a seven-year 2% convertible note, with a conversion price of $48.04 per share or preferred stock. The company will also use $1 billion of cash from the combined balance sheet to fund the transaction. Terms:

Borrower Avago Technologies
Issue $4.6 billion B term loan
UoP Fund acquisition of LSI
Spread L+300
LIBOR floor 0.75%
Price 99.5
Tenor seven years
YTM (once funded) 3.89%
Call protection 12 months 101 soft call
Corporate ratings BB+/Ba2/BB+
Facility ratings BBB-/Ba1/BBB-
S&P recovery rating 2
Financial covenants none
Arrangers DB, Barc, BAML, Citi
Admin agent DB
Price talk L+325/0.75%/99
Notes Ticking fee of 150 bps kicks in on June 1, stepping to 300 bps July 1; includes a 24-month MFN sunset provision

Men’s Wearhouse $1.1B loan backing Jos A Bank buy rises on entering secondary

menswearhouseThe $1.1 billion covenant-lite term loan for Men’s Wearhouse ticked to 99.625/100.125 after breaking secondary late this afternoon at 99.5/100, from issuance at 99, according to sources. The seven-year loan is priced at L+350, with a 1% LIBOR floor. J.P. Morgan and Bank of America Merrill Lynch arranged the deal, which cleared at the tight end of talk. Proceeds back the publicly traded retailer’s planned $1.8 billion acquisition of Jos. A. Bank. Since the deal isn’t expected to close until the third quarter, lenders will be paid a ticking fee of half of the drawn spread beginning in June; the fee steps up to the full drawn spread in July. The issuer is also putting in place a $500 million, five-year asset-based revolver. The financing for the merger is also expected to include a $600 million issue of unsecured notes, which have been bridged, SEC filings show. BAML is expected to be left lead on the bond deal. Terms:

Borrower Men’s Wearhouse
Issue $1.1 billion delayed-draw TLB
UoP Finance acquisition of Jos. A. Bank
Spread L+350
LIBOR floor 1.00%
Price 99
Tenor seven years
YTM 4.76%
Call protection 12 months 101 soft call
Corporate ratings B+/Ba3
Facility ratings B+/Ba2
S&P recovery rating 3
Financial covenants none
Arrangers JPM, BAML
Admin agent JPM
Price talk L+350-375/1%/99
Notes Ticking fee of 175 bps kick

Gilday joins MS as co-head of Euro lev. & acquisition finance

Ian Gilday is expected to start a new role this summer at Morgan Stanley as co-head of European leveraged and acquisition finance, alongside Matt Naber, according to market sources. Gilday brings 12 years’ experience in risk management, team building, and origination across the leveraged finance markets.

The hire further builds Morgan Stanley’s leveraged financing platform, and follows the hire of Yannick Perreve last year to spearhead the bank’s leveraged finance sponsor business in Europe. Emanuela Cisini also joined the leveraged finance team last July as executive director, while Richard Stiens was promoted to managing director within the team.

LCD reported earlier this week that Gilday had left his previous role at Goldman Sachs, having spent nine years at the bank. Most recently, Ian worked as head of EMEA CLO origination for the bank, a role he started last June, and prior to that he was head of syndicate and leveraged capital markets for the EMEA region. Before joining Goldman, Gilday spent five years in Merrill Lynch’s European leveraged finance team. –Sarah Husband


Credit Suisse to provide financing for Thoma Bravo’s TravelClick buy

travelclick logoCredit Suisse is providing financing for Thoma Bravo’s $930 million purchase of TravelClick from middle-market private equity firm Genstar Capital Management, sources said.

The sale is expected to close in the second quarter. Evercore served as financial advisor to Genstar and TravelClick.

TravelClick, based in New York City, provides reservations technology systems and marketing services for hotels.

Genstar and Bain Capital Ventures acquired TravelClick in 2007. Since the acquisition, TravelClick’s revenue and EBITDA have more than doubled, according to a joint press release from Genstar and Bain.

In March 2011, BMO Capital Markets arranged a $160 million term loan (L+500, 1.5% LIBOR floor) and a $20 million revolver to refinance junior and senior debt at TravelClick.

Last year, BMO arranged a $90 million second-lien term loan due 2018 for TravelClick to pay a dividend. At the same time, $192 million of TravelClick’s first-lien debt was repriced to L+450, with a 1.25% LIBOR floor.

To finance the 2007 buyout, San Francisco-based Genstar lined up a $105 million senior secured loan via Jefferies and $40 million of mezzanine debt via Blackstone Group. – Abby Latour

Follow Abby on Twitter @abbynyhk for middle-market deals, leveraged M&A, distressed debt, private equity, and more


Mallinckrodt $1.3B loan backing Cadence buy enters secondary above issue price

The $1.3 billion B term loan backing Mallinckrodt International Finance’s acquisition of Cadence Pharmaceuticals broke for trading today at 100/100.5, from issuance at 99.75, according to sources. The seven-year loan is priced at L+275, with a 0.75% LIBOR floor. Deutsche Bank arranged the loan, which cleared inside of original talk. The Dublin-based pharmaceutical concern is acquiring publicly held Cadence for $14 per share, or $1.3 billion. Terms:

Borrower Mallinckrodt International Finance
Issue $1.3 billion B term loan
UoP Fund acquisition of Cadence Pharmaceuticals
Spread L+275
LIBOR floor 0.75%
Price 99.75
Tenor seven years
YTM 3.59%
Call protection six months 101 soft call
Corporate ratings BB-/Ba3
Facility ratings (existing) BB+/Ba2
S&P recovery rating (existing) 1
Financial covenants none
Arrangers/bookrunners DB
Admin agent DB
Px talk L+275-300/0.75%/99.5
Notes Includes a step to L+250 @ 3.75x net leverage


Ocwen shelves $2.2B leveraged loan after regulator halts M&A deal

Wells Fargo, Bank of America Merrill Lynch, Barclays, and J.P. Morgan this morning postponed their $2.2 billion M&A-related financing for Ocwen Financial after New York regulators last week blocked the company’s proposed purchase of the rights to service a $39 billion mortgage portfolio from Wells Fargo, sources said.

The status of the financing was initially unclear after Benjamin Lawsky, superintendent of New York’s Department of Financial Services, on Thursday halted the purchase citing concerns over the mortgage servicer’s ability to handle more loans. At the time, Ocwen said it would “continue to work closely with the NY DFS to resolve its concerns about Ocwen’s servicing portfolio.”

The proposed $2.2 billion seven-year term loan was split between a $1.5 billion funded tranche that would have been used to refinance the issuer’s existing loans and a $700 million delayed-draw loan that was earmarked to help finance the servicing portfolio purchase by parent Ocwen Financial.

Amid strong investor demand for the loan, the arrangers flexed pricing down to L+287.5, with a 1% LIBOR floor, and a 99.75 offer price, from original talk of L+325 with a 1% floor at 99.5.

The issuer’s existing $1.29 billion term loan due 2018 will now remain in place. The loan is priced at L+375, with a 1.25% LIBOR floor. The 101 soft call protection rolls off this month.

B+/B1 Ocwen Financial, through its subsidiaries, provides asset-management services and loan servicing for residential and commercial mortgages. The company trades on the New York Stock Exchange under the ticker OCN with an approximate market capitalization of $5.62 billion. – Kerry Kantin/Chris Donnelly


Bain sweetens pricing on loan backing Bob’s Discount Furniture LBO

bobs discount funitureRBC Capital Markets and UBS have finalized pricing on the LBO financing for Bob’s Discount Furniture after increasing the spread on the first-lien term loan and cutting the offer price on the second-lien, according to sources.

The spread for the $180 million, seven-year first-lien term loan was increased to L+425, from original talk of L+400, while the 1% LIBOR floor and 99 offer price remain unchanged, according to sources. At the revised level, the yield-to-maturity increases to 5.54%, from 5.28%. The loan includes 101 soft call protection for 6 months.

Pricing for the $80 million, eight-year second-lien term loan is unchanged, at L+800, with a 1% LIBOR floor, but the OID was cut to 98, from 99. With that, the yield-to-maturity is 9.7%, versus 9.5% as initially outlined. The second-lien will be callable at 102 and 101 in years one and two.

The financing will also include a $40 million asset-based revolver.

Corporate ratings are B/B3. The first-lien is rated B/B2, with a 3 recovery rating. The second-lien is rated CCC+/Caa1, with a 6 recovery rating.

The financing supports the buyout of Bob’s by Bain Capital, which was announced in December. Bain is taking a majority stake in the retailer from Apax Partners, KarpReilly and other shareholders. Company management will continue to own a significant stake.

Bob’s Discount Furniture, based in Manchester, Conn., operates as a furniture retailer, with 47 stores located throughout the Northeast and Mid-Atlantic regions. – Jon Hemingway


Europe: Alcentra finances buyout of Chesapeake’s Plastic Packaging

Alcentra has provided a unitranche to support the buyout of Chesapeake‘s Plastic Packaging Division by CEREA Partenaire, together with Bpifrance, Chemark and management. As well as supporting the buyout, the roughly €25 million, seven-year unitranche will provide capital for the business’ growth strategy in areas of high agricultural development, particularly in Brazil and Russia.

Frederic Mereau from Alcentra’s European Direct Lending and Mezzanine Investments team will represent the firm on the company’s Board of Directors as an observer.

The division, which will soon be renamed, combines the former activities of Chesapeake Specialty Chemicals Packaging in France, the U.K., and Hungary.

Headquartered in France and founded in 1987 by its current CEO, Jean-Philippe Morvan, the company is the European leader in specialty plastic packaging barriers, focusing on delivering high-quality products and services for the transport and storage of goods to customers, predominantly trading in the agrochemical and flavouring sectors.

The deal follows recent investments in Cambridge Education and Caffe Nero, as well as a U.K. waste management business (all executed over the last month).

Alcentra has been sourcing and arranging financing to middle-market businesses since its launch in 2003. To date, the company has invested over €1.8 billion in more than 85 middle-market transactions across senior debt, second lien, mezzanine, and equity co-investments. – Sarah Husband


Quest Diagnostics to buy Solstas in $570M deal

solstas lab partners logoQuest Diagnostics is buying Solstas Lab Partners Group from private equity firm Welsh, Carson, Anderson and Stowe in a $570 million transaction.

The deal is expected to close in the first half of 2014.

Greensboro, North Carolina-based Solstas is a full-service commercial laboratory company with operations in the Southeastern U.S., including North and South Carolina, Virginia, Tennessee, Georgia, and Alabama.

NYSE-listed Quest Diagnostics offers cost-effective diagnostic testing through a national network of laboratories and 2,000 patient locations in the U.S., as well as operations in India, Ireland, Mexico and Britain.

Welsh, Carson, Anderson and Stowe specializes in the information/business services and healthcare industries. – Abby Latour


Ortho-Clinical Diagnostics nets financing for Carlyle-led buyout

Ortho-Clinical DiagnosticsBarclays, Goldman Sachs, Credit Suisse, UBS and Nomura have committed to provide debt financing for The Carlyle Group’s $4.15 billion purchase Johnson & Johnson’s Ortho-Clinical Diagnostics business, sources said.

The deal, which won’t close until mid-2014, would include $2.15 billion of term debt and roughly $1.15 billion of bonds, sources said.

The unit is a global provider of solutions for screening, diagnosing, monitoring and confirming diseases. Headquartered in Raritan, N.J., with manufacturing operations in Rochester, N.Y., Pompano Beach, Fla. and Pencoed, Wales, OCD operates in 130 countries. OCD serves clinical laboratories and the transfusion-medicine community around the world. – Chris Donnelly