Blue Buffalo cuts term B to $350 million, revises discount to 98

By Sara Rosenberg

New York, July 31 - Blue Buffalo Co. downsized its seven-year term loan B to $350 million from $430 million and widened the original issue discount to 98 from 99, according to a market source.

Pricing on the loan was left unchanged at Libor plus 525 basis points with a 1.25% Libor floor, and there is still 101 soft call protection for one year.

Also, the secured leverage ratio on the accordion was set at 3.5 times, the source said.

And, the secured leverage covenant is now opening up at 5.0 times, stepping down by 0.25 times increments over the life of the loan until it hits 3.75 times, the source added.

Recommitments were due at the end of the day on Tuesday.

The company's now $390 million credit facility (B1/B+), down from $470 million, also includes a $40 million five-year revolver.

Citigroup Global Markets Inc. and Morgan Stanley Senior Funding Inc. are the lead banks on the deal.

Proceeds will be used primarily to fund a dividend, the size of which was reduced as a result of the term loan downsizing.

Blue Buffalo is a Wilton, Conn.-based pet food company.

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