Compass Group firms $500 million term loan B at Libor plus 250 bps

By Sara Rosenberg

New York, April 5 – Compass Group Diversified Holdings LLC set pricing on its $500 million seven-year term loan B (Ba3/BB) at Libor plus 250 basis points, the high end of the Libor plus 225 bps to 250 bps talk, and added a step-down to Libor plus 225 bps when total net leverage is less than or equal to 2.75 times, according to a market source.

Also, the original issue discount on the term loan was tightened to 99.75 from 99.5, the source said.

The term loan still has a 0% Libor floor and 101 soft call protection for six months.

Covenants include a secured net leverage ratio and a total net leverage ratio.

Bank of America Merrill Lynch, SunTrust Robinson Humphrey Inc., TD Securities (USA) LLC and U.S. Bank are the lead arrangers on the deal.

Commitments were scheduled to be due at 4 p.m. ET on Thursday, the source added.

Proceeds will be used with $400 million of senior notes to refinance an existing $560 million term loan B and outstanding revolving credit facility borrowings.

Compass Group is a Westport, Conn.-based acquirer, owner and manager of a diverse group of subsidiaries operating within the industrial and branded consumer industries.

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