Harland shifts to $600 million term B-4 talked at Libor plus 500 bps

By Sara Rosenberg

New York, Jan. 27 - Harland Clarke Holdings Corp. is now looking to get a $600 million first-lien covenant-light term loan B-4 (B1/B+) due August 2019, instead of a $500 million first-lien covenant-light tack-on term loan B-3 due May 2018, according to a market source.

The term loan B-4 is talked at Libor plus 500 basis points with a 1% Libor floor and an original issue discount of 991/2, the source said, whereas the B-3 tack-on loan was talked at Libor plus 550 bps with a 1.5% Libor floor and a discount of 99.

The term loan B-4 has 101 soft call protection for one year, compared to the tack-on B-3 loan that was going to have call protection of 102 through April 2014, then 101 for a year.

Amortization on the term loan B-4 is 2.5% per annum.

Commitments were due at 2 p.m. ET on Monday, the source added.

The company is also getting a $150 million asset-based revolving credit facility due Feb. 20, 2018 with pricing that can range from Libor plus 175 bps to 225 bps, based on availability, and an unused fee that can range from 37.5 bps to 50 bps based on usage.

Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Jefferies Finance LLC are the lead banks on the debt.

Proceeds will be used to help fund the acquisition of Valassis for $34.04 per share in cash, representing a transaction value of about $1.84 billion, to refinance existing debt and for general corporate purposes.

Other funds for the transaction will come from $275 million of senior secured notes and $540 million of unsecured notes, downsized from $590 million, as a result of the term loan upsizing.

The other $50 million of additional term loan funds being raised through the upsizing will be used to refinance the company's floating rate notes.

Closing is expected this quarter. The transaction will be effected through a tender offer for all of the shares of Valassis and is subject to the tender of the majority of Valassis' shares, expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and customary conditions.

The combined company has about $3.3 billion of revenues.

Harland Clarke is a San Antonio-based provider of payment, marketing and security services. Valassis is a Livonia, Mich.-based provider of media solutions.

© 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.