Builders FirstSource launches term loan B at Libor plus 400-425 bps

By Sara Rosenberg

New York, July 14 – Builders FirstSource Inc. launched on Tuesday its $550 million seven-year covenant-light term loan B (B3/BB-) with price talk of Libor plus 400 basis points to 425 bps with a 1% Libor floor and an original issue discount of 99, according to a market source.

The term loan B has 101 soft call protection for six months and amortization of 1% per annum.

Commitments are due on July 23, the source said.

The company’s $1.35 billion credit facility also includes an $800 million ABL revolver.

Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey Inc. and Keybanc Capital Markets are the bookrunners on the deal.

Proceeds will be used to help fund the acquisition of ProBuild Holdings LLC in an all-cash transaction valued at about $1.63 billion.

Other funds for the acquisition will come from $750 million of senior notes and $100 million in new equity via a marketed follow-on offering.

The company also plans to roll over $350 million of existing Builders FirstSource senior secured notes and will assume $304 million in existing lease finance obligations.

Pro forma net debt to adjusted EBITDA is 5.6 times.

Closing is expected in the second half of this year, subject to customary conditions and regulatory approvals.

Builders FirstSource is a Dallas-based supplier and manufacturer of structural and related building products for residential new construction. ProBuild is a Denver-based supplier of lumber and building materials to professional builders and contractors.

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