HD Supply firms pricing on $537 million B-3, $547 million B-4 loans

By Sara Rosenberg

New York, Aug. 24 – HD Supply Inc. set pricing on its $537 million covenant-light term loan B-3 due Aug. 13, 2021 at Libor plus 225 basis points, the high end of the Libor plus 200 bps to 225 bps talk, and on its $547 million covenant-light term loan B-4 due Oct. 17, 2023 at Libor plus 250 bps, the high end of the Libor plus 225 bps to 250 bps talk, according to a market source.

Also, the original issue discount on both term loans finalized at 99.875, the wide end of the 99.875 to par guidance, the source said.

Both term loans still have a 0% Libor floor and 101 soft call protection for six months.

Bank of America Merrill Lynch is the lead bank on the $1,084,000,000 in term loans.

Proceeds will be used to reprice an existing term loan B-1 and an existing term loan B-2 from Libor plus 275 bps with a 0% Libor floor.

Closing is expected during the week of Aug. 28.

Pro forma for a first-lien notes redemption and $381 million ABL revolver paydown with proceeds from the sale of its Waterworks business to Clayton, Dubilier & Rice, net secured leverage is 1.3 times, secured leverage is 1.7 times and total leverage is 3.2 times.

HD Supply is an Atlanta-based industrial distributor.

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