Arkansas Best getting $100 million term loan at Libor plus 175 bps

By Sara Rosenberg

New York, June 14 - Arkansas Best Corp. plans on closing on Friday on a $100 million five-year senior secured term loan that is initially priced at Libor plus 175 basis points, company officials said in a conference call on Thursday.

Pricing on the loan can range from Libor plus 125 bps to 250 bps.

U.S. Bank is the bookrunner, lead arranger and administrative agent on the deal.

Amortization is $10 million in year one, $12.5 million in year two, $15 million in year three and $17.5 million in years four and five.

There is a $75 million accordion feature.

Financial covenants include fixed-charge coverage and adjusted leverage ratios, officials added.

Proceeds will be used to help fund the acquisition of Panther Expedited Services Inc. from Fenway Partners LLC for about $180 million, subject to post-closing adjustments, with all of Panther's outstanding debt being repaid as part of the transaction.

Other funds for the acquisition will come from $80 million of cash on hand.

Total leverage will be 1.4 times and leverage through the term loan is 0.8 times.

The combined company will have revenues of over $2.1 billion and 2011 adjusted EBITDA of $123 million.

Arkansas Best is a Fort Smith, Ark.-based provider of freight transportation and logistics services. Panther is a Seville, Ohio-based expedited transportation and premium logistics provider.

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