Fairbanks Morse to launch $280 million of term loans on Thursday

By Sara Rosenberg

New York, Dec. 8 – Fairbanks Morse Defense (Arcline FM Holding LLC) is scheduled to hold a bank meeting at 1 p.m. ET on Thursday to launch $280 million of incremental term loans, according to a market source.

Jefferies LLC is the lead arranger on the deal.

The debt consists of a fungible $240 million incremental first-lien term loan due June 23, 2028 talked with an original issue discount of 99 to 99.5 and a fungible $40 million incremental second-lien term loan due June 23, 2029 talked with a discount of 98.5 to 99, the source said.

Pricing on the incremental first-lien term loan is Libor plus 475 basis points with a 0.75% Libor floor, and pricing on the incremental second-lien term loan is Libor plus 825 bps with a 0.75% Libor floor.

Commitments are due at 5 p.m. ET on Dec. 17, the source added.

Proceeds will be used to fund an acquisition and pay down the outstanding balance on an ABL facility.

Pro forma for the transaction, the first-lien term loan will total $985 million and the second-lien term loan will total $252.5 million.

Fairbanks Morse Defense is a Beloit, Wis.-based provider of propulsion systems, ancillary power, motors and controllers for the U.S. Navy and U.S. Coast Guard, and provider of associated parts and maintenance services.

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