Environmental Resources revises first-lien term loan pricing

By Sara Rosenberg

New York, May 7 - Environmental Resources Management decreased the spread on its roughly $655 million seven-year covenant-light first-lien term loan debt (B1/B) to Libor/Euribor plus 400 basis points from Libor/Euribor plus 450 bps and added a 1% floor to the debt, which previously had no floor, according to a market source.

The first-lien term debt is split between a $480.6 million B1A tranche for the U.S./Canada borrower, a $119.4 million B1B tranche for the UK/Australia borrower and a €40 million B2 tranche for the UK/German borrower.

The B1A and B1B tranches are now talked at an original issue discount of 99 to 991/2, as opposed to at 991/2, and the B2 tranche is now talked at 99½ to par, instead of at 991/2, the source said.

All of the first-lien term loans still have 101 soft call protection for one year.

The company is also getting a $175 million eight-year covenant-light second-lien term loan (Caa1/CCC+) that remained priced at Libor plus 700 bps with a 1% Libor floor and a discount of 99.

As before, the second-lien loan has hard call protection of 102 in year one and 101 in year two.

Along with the first-lien term loan changes, the 18-month MFN sunset was eliminated.

Recommitments were due at 5 p.m. ET on Wednesday, the source added.

Deutsche Bank Securities Inc., BNP Paribas Securities Corp. and HSBC Securities (USA) Inc. are the bookrunners on the $830 million deal, with Deutsche left lead on the first-lien loan and BNP left lead on the second-lien loan.

Proceeds will be used to refinance debt and fund a dividend to shareholders.

Environmental Resources is a provider of environmental, health, safety, risk and social consulting services.

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