Brock lowers coupon on $500 million term loan to SOFR plus 600 bps

Chicago, April 25 – Brock Holdings III LLC and Brock Canada Inc. adjusted pricing on their $500 million six-year first-lien term loan B (B3/B), according to a market source.

The loan has an updated coupon of SOFR plus 600 basis points, down from 625 bps. There is still a 25 bps stepdown on the achievement of a 4x net first-lien leverage ratio. The 0.5% floor is unchanged.

The discount has firmed at 98, the high end of the 97 to 98 talk.

As a result, the commitment deadline was extended to noon ET on Thursday from the original commitment deadline at 5 p.m. ET on Wednesday.

Additionally, there have been document changes. For debt incurrence, the non-guarantor sublimit under the ratio debt basket has been changed to the greater of $65 million and 50% of EBITDA, instead of $95 million and 75% of EBITDA.

For the covenant regarding restricted payments, unlimited restricted payments will be tied to a 3.25x net total leverage ratio versus 3.5x. The general restricted payment basket will be the greater of $37.5 million and 30% of EBITDA rather than $45 million and 35% of EBITDA.

Related to investments, unlimited investments will be linked to a 4x net total leverage ratio instead of 4.25x or “no worse than.” The general investment basket will be based on the greater of $95 million and 75% of EBITDA, rather than $125 million and 100%. Investments in unrestricted subsidiaries will have limits of the greater of $30 million and 25% of EBITDA, lower than an initial $45 million and 35%.

Serta protection is now included.

Mandatory quarterly calls will be required.

Call protection has been reset to a 101 hard call for 12 months from the closing date instead of a 101 soft call for six months.

The company also plans on getting a $150 million asset-based revolving credit facility.

Deutsche Bank Securities Inc. is the left bookrunner on the deal and the administrative agent. Bookrunners include Ally, CIBC, KKR and MUFG. Deutsche Bank will be the administrative agent.

Proceeds will be used to refinance the company’s existing capital structure.

Brock is a Houston-based industrial specialty craft services provider of scaffolding, coatings, insulation, painting, abatement, and other soft crafts, as well as mechanical and safety services.

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