Beacon cuts coupon on $970 million term B to Libor plus 225 bps

New York, Oct. 11 – Beacon Roofing Supply Inc. lowered the coupon on its $970 million seven-year senior secured covenant-light term loan B (B1) to Libor plus 225 basis points from talk of Libor plus 250 bps to 275 bps, according to a market source.

As previously, the loan has a 0% Libor floor and an original issue discount of 99.5.

Also unchanged, the term loan has 101 soft call protection for six months, amortization of 1% per annum and a ticking fee of half the spread from days 31 to 60, the full spread from days 61 to 90 and Libor plus the full spread thereafter, the source said.

Mandatory prepayments are from 50%, 25% or 0% of excess cash flow based on senior secured leverage, 100% of debt issuance proceeds other than permitted debt, and 100% of asset sale and insurance proceeds subject to reinvestment rights.

The accordion under the term loan is the greater of $675 million and an unlimited amount subject to pro forma consolidated secured leverage ratio of 3.5 times.

The company’s $2.27 billion of senior secured credit facilities also include a $1.3 billion asset-based revolver.

Citigroup Global Markets Inc., Wells Fargo Securities LLC, Bank of America Merrill Lynch, J.P. Morgan Securities LLC and SunTrust Robinson Humphrey Inc. are the joint lead arrangers on the deal, with Citi the left lead on the term loan B and Wells Fargo the left lead on the revolver.

Commitments were due at 5 p.m. ET on Oct. 11, the source added.

Proceeds will be used to help fund the $2,625,000,000 acquisition of Allied Building Products Corp. and refinance an existing $440 million term loan B.

Other funds for the transaction will come from $1.3 billion of senior unsecured notes and a commitment from Clayton, Dubilier & Rice to provide $400 million in perpetual convertible preferred equity.

Closing is targeted for Jan. 2, subject to regulatory approvals and customary conditions.

Beacon Roofing is a Herndon, Va.-based distributor of residential and commercial roofing materials and complementary building products. Allied Building is an East Rutherford, N.J.-based distributor of exterior and interior building products.

© 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.