DynCorp cuts spread on $565 million term loan to Libor plus 450 bps

By Sara Rosenberg

New York, June 29 - DynCorp International Inc. lowered pricing on its $565 million term loan to Libor plus 450 basis points from Libor plus 475 bps and firmed the original issue discount at 98, the tight end of the 97 to 98 talk, according to a market source.

Also, 101 soft call protection for one year was added to the term loan, the source said.

As before, the loan includes a 1.75% Libor floor.

The company's $715 million credit facility (Ba1/BB) also includes a $150 million revolver.

Bank of America, Citigroup, Barclays Bank and Deutsche Bank are the lead banks on the deal, with Bank of America the left lead.

Proceeds will be used to help fund the buyout of the company by Cerberus Capital Management LP for $17.55 in cash per share. The transaction is valued at about $1.5 billion, including the assumption of debt.

Other financing for the acquisition of DynCorp will come from $455 million of senior unsecured notes and $591.6 million in equity.

Closing is expected in the third or fourth quarter, but could close as early as the end of June, subject to customary conditions.

DynCorp is a Falls Church, Va.-based government services provider in support of U.S. national security and foreign policy objectives.

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