Vericast finalizes amendment to revise loans, add notes to structure

By Sara Rosenberg

New York, Oct. 26 – Vericast Corp. has received 100% consent participation from holders of its 2021 term loan due June 2026 to amend amortization on $786,321,822.60 of the debt and exchange $262,394,271.69 of the debt into new second-lien notes due 2027, according to a market source.

The actual size of the second-lien notes tranche is about $272.7 million because of original issue discount and a 25 bps consent fee being paid in additional principal for the second-lien notes. The notes have a 12½% coupon to yield 13½%, the source said.

Through the amortization amendment, the company is getting an amortization holiday on the term loan for four quarters, resulting in amortization being rescheduled to 2025.

The company has also received 22.3% consent participation from lenders under its roughly $48.9 million stub term loan due November 2023 to extend the maturity to June 2026 and roll the debt into one tranche with the existing term loan due June 2026. The amount being rolled into the single tranche is $8,723,480.36 following a $2,180,870.09 pay down to consenting stub term loan lenders.

The remaining roughly $38 million stub term loan that wasn’t extended will continue to mature in November 2023.

As part of this transaction, pricing on the term loan debt due June 2026 is converting to SOFR from Libor and CSA is being added. The spread is unchanged at 775 basis points with a 1% floor. CSA is around 11 bps one-month rate, 26 bps three-month rate and 42 bps six-month rate, the source added.

A 25 bps consent fee is being paid in cash to the 2021 term loan lenders and a 100 bps consent fee is being paid to the stub term loan lenders who consented/extended.

Jefferies LLC is the bookrunner on the deal.

Closing on the amendment/exchange is expected on Thursday.

Pro forma for the transaction, first-lien net leverage is 5.4x, down from 6.1x, and first-lien leverage is 5.5x, down from 6.2x. Total net leverage is unchanged at 7.3x and total leverage is unchanged at 7.4x.

Vericast, formerly known as Harland Clarke Holdings Corp., is a marketing solutions company.

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