Vertis Holding downsizes first-lien term loan to $365 million, drops second-out loan

By Sara Rosenberg

New York, Aug. 13 - Vertis Holding Inc. reduced the size of its five-year first-out term loan to $365 million from $425 million and removed the $150 million second-out term loan from the capital structure, according to a market source.

Pricing on the first-out loan was left unchanged at Libor plus 900 basis points with a 2% Libor floor and an original issue discount of 97.

Also unchanged is the term loan's call protection of 104 in year one, 103½ in year two, 102 in year three and 101 in year four.

As a result of the first-out term loan downsizing and the removal of the second-out loan, the company increased its second-lien mezzanine notes to $402 million, the source said.

The eliminated second-out term loan was going to be backstopped by existing holders.

The company's now $555 million, down from $765 million, credit facility also includes a $190 million senior secured asset-based revolver.

Credit Suisse and Citadel are leading the term loans, and GE Capital, Bank of America and Citibank have provided commitments toward the revolver, with GE the left lead.

The revolver is being clubbed up with relationship banks.

Proceeds will be used to refinance an existing term loan and $225 million revolver and fund the cash consideration for an exchange offer for the company's 18½% senior secured second-lien notes due 2012.

Vertis is a Baltimore-based marketing communications company.

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