Phillips Pet Food shifts funds between term loans, revises OIDs

By Sara Rosenberg

New York, Jan. 27 - Phillips Pet Food & Supplies upsized its first-lien term loan (B1/B) to $280 million from $260 million and downsized its second-lien term loan (Caa1/CCC+) to $110 million from $130 million, according to a market source.

In addition, the original issue discount on the first-lien term loan was moved to 99¾ from 99½ and the discount on the second-lien term loan was changed to 99½ from 99, the source said.

Pricing on the first-lien term loan is still Libor plus 350 basis points with a 1% Libor floor, and pricing on the second-lien loan is still Libor plus 725 bps with a 1% Libor floor.

Also unchanged was the 101 soft call protection for six months on the first-lien loan and the call protection of 102 in year one and 101 in year two on the second-lien loan.

Earlier in syndication, pricing on the first-lien term loan was lowered from talk of Libor plus 375 bps to 400 bps and the soft call protection was added, and pricing on the second-lien loan was reduced from talk of Libor plus 750 bps to 775 bps.

Along with the term loans, the company's $450 million credit facility includes a $60 million ABL revolver.

Recommitments are due at noon ET on Tuesday, the source added.

Jefferies Finance LLC, Goldman Sachs Bank USA and BMO Capital Markets are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by Thomas H. Lee Partners from AEA Investors.

Phillips Pet is an Easton, Pa.-based distributor of pet food and supplies.

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