Direct ChassisLink trims term loan to $825 million, raises pricing

By Sara Rosenberg

New York, April 5 – Direct ChassisLink Inc. (Drive Chassis Holdco LLC) downsized its seven-year covenant-lite term loan to $825 million from $850 million and increased pricing to Libor plus 825 basis points from talk in the range of Libor plus 725 bps to 750 bps, according to a market source.

Also, the original issue discount talk on the term loan was revised to a range of 96 to 97 from 99, and the call protection was changed to non-callable for one year, then at 102 in year two and 101 in year three from hard call protection of 102 in year one and 101 in year two, the source said.

Incremental free and clear is the greater of $187.5 million and 0.75 times EBITDA.

The MFN is 50 bps with no sunset and applies to all pari term loans.

The asset sale sweep annual basket carve-out is $32.5 million per year, de minimis amount carve-out is $10 million per transaction, reinvestment period is 12 months plus six months reinvestment period, and step-downs were removed, the source continued.

Pro forma EBITDA calculation for cost savings/synergies saw the addition of a cap to add-backs to EBITDA of 25% and a realization period of 24 months.

Ratio baskets for pari debt is unlimited subject to closing date net secured leverage ratio and for junior/unsecured debt is unlimited subject to 0.5 times outside closing date net total leverage ratio. The inside maturity basket was removed.

Additional updates were made to indebtedness, liens, cumulative credit, investments and restricted payments.

As before, the term loan has a 0% Libor floor.

Citigroup Global Markets Inc., Barclays, RBC Capital Markets, Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and MUFG are the joint lead arrangers on the deal. Citigroup is the administrative agent.

Commitments are due at noon ET on Tuesday, the source added.

Proceeds will be used to help fund the buyout of the company by Apollo Global Management LLC from EQT Infrastructure, who will retain a 20% minority stake.

Closing is expected in early/mid-April, subject to customary regulatory approvals.

Direct ChassisLink is a Charlotte, N.C.-based provider of domestic and marine chassis to the intermodal supply chain.

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