Cyanco sets spread on $420 million term loan B at SOFR plus 475 bps

By Sara Rosenberg

New York, June 29 – Cyanco Intermediate 2 Corp. firmed pricing on its $420 million five-year covenant-lite term loan B (B2/B) at SOFR plus 475 basis points, the low end of the SOFR plus 475 bps to 500 bps talk, according to a market source.

Also, the floor was increased to 1% from 0%, the source said.

The accordion was changed to 4.25x leverage from 4.5x for first-lien debt, 5.25x leverage from 5.75x for secured debt, and 5.5x leverage from 5.75x with the removal of the fixed charge coverage ratio option from total debt, and the “no worse than” prongs were removed.

MFN was revised to 50 bps for 24 months and applicable to any pari secured, syndicated, floating-rate incremental term loans denominated in U.S. dollars, removing carve outs added to the existing agreement, and MFN was expanded to apply to pari secured, syndicated, floating-rate term loans denominated in U.S. dollars incurred in reliance on exceptions for incremental equivalent debt, ratio debt and acquisition debt baskets.

Also, secured/total ratio debt was modified to 5.25x/5.5x from 5.75x total with the removal of the fixed charge coverage ratio option, acquisition debt was changed to total 5.5x from the fixed charge coverage ratio option and “no worse than” prongs were removed, the equity contribution basket was reduced to 100% from 200%, the restricted payments capacity debt basket was removed, first-lien/secured ratio liens were revised to 4.25x/5.25x from 4.5x first-lien, and acquisition liens were adjusted to 4.25x from 4.5x and “no worse than” prongs were removed, the source continued.

The restricted payments unlimited ratio basket was revised to total 3.5x from 4x, restricted debt payments total was changed to 4x from 4.5x, investments total was adjusted to 4x from 4.5x, asset sale sweeps was modified to 12 months + 6 months from 18 months + 6 months, and consolidated EBITDA/pro forma adjustments was capped at 25% with an 18-month look forward from being uncapped with 36 months look forward.

Under unrestricted subsidiaries, a total net leverage ratio test was added equal to closing leverage and the condition that the aggregate EBITDA attributable to unrestricted subsidiaries is less than 10% of total EBITDA.

Lastly, quarterly lender calls were added, and Chewy was expanded to include a requirement that the primary purpose of the relevant transaction was not to cause the release of such subsidiary.

The term loan still has an original issue discount of 97 and 101 soft call protection for six months.

Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc., RBC Capital Markets and Societe Generale are the bookrunners on the deal.

Recommitments were scheduled to be due at 2 p.m. ET on Thursday, the source added.

Proceeds will be used to refinance an existing term loan B.

Cashless roll was available.

Closing is expected in early July.

Cyanco is a Sugar Land, Tex.-based supplier of sodium cyanide and the only pure play provider in the market with world-scale capabilities in both liquid and solid-form NaCN.

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