UTEX Industries launches $97 million add-on loan at Libor plus 550 bps

By Sara Rosenberg

New York, March 8 - UTEX Industries Inc. held a conference call at 3 p.m. ET on Thursday to launch a proposed $97 million add-on term loan that is talked at Libor plus 550 basis points with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

Societe Generale, GE Capital Markets and ING Financial Markets LLC are the joint lead arrangers on the deal, with Societe Generale and GE as bookrunners.

Proceeds will be used to fund a dividend.

With the add-on, the company is seeking to amend its existing credit facility to allow for the new debt and the dividend, and to eliminate the existing $30 million delayed-draw term loan.

Additionally, the amendment would increase pricing on the existing term loan to Libor plus 550 bps from Libor plus 500 bps, while leaving the 1.5% Libor floor unchanged, the source said.

Lenders are being offered a 25 bps amendment fee.

Commitments are due on March 20.

Total leverage will be 3.9 times, up from around 2.25 times currently, the source said.

UTEX Industries is a Houston-based designer and manufacturer of sealing products.

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