Capital Automotive launches $100 million second-lien loan at 99 OID

By Sara Rosenberg

New York, Sept. 4 – Capital Automotive LP launched on Thursday its $100 million incremental second-lien term loan with price talk of Libor plus 500 basis points with a 1% Libor floor and an original issue discount of 99, according to a market source.

The spread and floor on the incremental loan match the existing second-lien term loan.

All of the second-lien term loan debt will have hard call protection of 102 in year one and 101 in year two, the source said.

Barclays is the lead bank on the deal.

Proceeds will be used to help fund the acquisition of the company by Brookfield Property Partners from DRA Advisors LLC.

Other funds for the acquisition will come from $300 million of ABS debt.

In connection with the transaction, Capital Automotive is seeking an amendment to its existing credit facility to allow for the change-of-control, decrease the capitalization rate to 7.25%, increase the maximum second priority lien amount to $450 million and refresh the 101 soft call protection for six months on its existing first-lien term loan, the source added.

Revolver and first-lien term loan lenders are being offered a 25 bps amendment fee, and second-lien lenders are being offered a 75 bps amendment fee.

Commitments and consents are due on Sept. 12.

Capital Automotive is a McLean, Va.-based provider of sale-leaseback capital to the automotive retail industry.

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