Flow Control sets discount talk on first- and second-lien term loans

By Sara Rosenberg

New York, July 21 – Flow Control Group (FCG Acquisitions Inc.) launched on Wednesday its fungible upon draw $120 million 18-month delayed-draw first-lien term loan (B2/B-) due April 1, 2028 with original issue discount talk of 99.5 and its fungible upon draw $50 million 18-month delayed-draw second-lien term loan (Caa2/CCC) due April 1, 2029 with discount talk of 99, according to a market source.

Like the existing term loans, pricing on the delayed-draw first-lien term loan is Libor plus 375 basis points with a 25 bps step-down at 5.9x total net leverage and upon an initial public offering, and a 0.5% Libor floor, and pricing on the delayed-draw second-lien term loan is Libor plus 675 bps with a 25 bps step-down upon an initial public offering and a 0.5% Libor floor.

The first-lien term loan has 101 soft call protection until Oct. 1, and the second-lien term loan has the same 102, 101 call protection as the existing second-lien term loan.

Delayed-draw ticking fees are half the spread from days 61 to 120 and the full spread thereafter.

Incurrence is subject to 5.5x first-lien net leverage for first-lien draws and 6.5x senior secured net leverage for second-lien draws, the source continued.

Credit Suisse Securities (USA) LLC, UBS Investment Bank, KKR Capital Markets and SPC are the lead arrangers on the deal, with Credit Suisse the left lead on the first-lien loan and UBS the left lead on the second-lien loan.

Commitments are due at noon ET on Tuesday.

Proceeds will be used to for working capital and other general corporate purposes.

Flow Control is a Charlotte, N.C.-based distributor and technical adviser for mission critical flow control and industrial automation products and related services.

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