Northeast Grocery firms $550 million term loan B at 97 OID

By Sara Rosenberg

New York, Dec. 5 – Northeast Grocery Inc. finalized the original issue discount on its $550 million five-year term loan B (B3/B+/BB+) at 97, the tight end of the 96 to 97 talk, according to a market source.

Also, the accordion was changed to the greater of $90 million and 0.25x LTM EBITDA and unlimited subject to first-lien 2.25x net, or “no worse” if in connection with a permitted acquisition, from $180 million and 0.5x LTM EBITDA and unlimited subject to first-lien 2.5x net or “no worse.”

MFN was revised to apply to pari notes or term loans incurred as incremental facility, incremental equivalent debt, ratio debt or credit facilities debt, versus to apply to pari term loans incurred as incremental facility, incremental equivalent debt, ratio debt or credit facilities debt, the source continued.

In addition, ratio debt was changed to first-lien 2.25x net from 2.5x, qualified receivable financing was capped at $25 million, versus uncapped previously, and incremental equivalent debt now has guaranties by non-loan parties capped at the greater of $75 million and 3.5% of total assets, versus no cap on guaranties by non-loan parties.

Furthermore, available amount for restricted payments and debt prepayment is now subject to 2.4x total net leverage, revised from subject to a 2x interest coverage ratio, EBITDA add-back cap was set at a 20% cap on synergies and restructuring/optimization expenses, changed from a 15% cap on synergies and no cap on restructuring/optimization expenses, and quarterly lender call and management discussion and analysis are now required, as opposed to quarterly lender calls at the agent’s request and quarterly management discussion and analysis.

Pricing on the term loan remained at SOFR plus 750 basis points with a 1% floor, and the debt is still non-callable for one year, then at 103 in year two and 101 in year three.

Deutsche Bank Securities Inc., UBS Investment Bank and BofA Securities Inc. are the bookrunners on the deal.

Recommitments were scheduled to be due at 11 a.m. ET on Tuesday, the source added.

Proceeds will be used to refinance existing debt.

Northeast Grocery is a Schenectady, N.Y.-based traditional food retailer.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.