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Savage Enterprises flexes $1.1 billion term B to Libor plus 450 bps
By Sara Rosenberg
New York, June 28 – Savage Enterprises LLC raised pricing on its $1.1 billion seven-year term loan B (B1/B+) to Libor plus 450 basis points from talk in the range of Libor plus 325 bps to 350 bps, according to a market source.
Also, the original issue discount on the term loan widened to 98 from 99.5, the 101 soft call protection was extended to one year from six months, and amortization was increased to 5% per annum in years one, two and three and 1% per annum thereafter, from 1% per annum, the source said.
Furthermore, a net first-lien leverage covenant of 5.25 times was added to the previously covenant-light term loan and MFN was revised to 50 bps for life.
In addition, the incremental was reduced to $225 million from $300 million, the EBITDA grower was eliminated, the ratio debt was lowered to 3 times from 3.5 times and the ABL was removed from the shared incremental.
Other changes included reducing the available restricted payment amount to the greater of $30 million and 10% of EBITDA from $50 million and 15% of EBITDA, placing a 20% cap on EBITDA addbacks and requiring quarterly calls with management discussion and analysis.
As before, the term loan has a 0% Libor floor.
The company’s $1.5 billion of senior secured credit facilities also include a $400 million ABL revolver.
Morgan Stanley Senior Funding Inc., Wells Fargo Securities LLC, PNC Capital Markets LLC and Citigroup Global Markets Inc. are the lead banks on the deal.
Commitments are due at noon ET on Monday, the source added.
Proceeds will be used to finance the purchase of Bartlett and Co. and pay related fees and expenses.
Closing is expected in August.
Savage is a Salt Lake City-based supply chain provider. Bartlett is a Kansas City, Mo.-based grain and milling firm.
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