Dessert reworks first- and second-lien loan sizes, updates pricing

By Sara Rosenberg

New York, June 7 – Dessert Holdings upsized its first-lien term loan to $400 million from $380 million, downsized its second-lien term loan to $115 million from $135 million and added a $20 million delayed-draw second-lien term loan to the transaction, according to a market source.

The now $685 million of credit facilities, up from $665 million, still include a $75 million delayed-draw first-lien term loan and a $75 million revolver.

Also, pricing on the first-lien term loan debt firmed at Libor plus 400 basis points, the low end of the Libor plus 400 bps to 425 bps talk, and pricing on the second-lien term loan debt was set at Libor plus 725 bps, the low end of the Libor plus 725 bps to 750 bps talk, the source said.

In addition, the original issue discount on the first-lien term loan debt was tightened to 99.25 from 99.

Ticking fees on the delayed-draw term loans are half the margin from days 46 to 90 and the full margin thereafter, revised from half the margin from days 61 to 120 and the full margin thereafter.

Other changes included eliminating the asset sale sweep step-downs, and providing Serta, Chewy and J. Crew protection, the source continued.

The first-lien term loan debt still has a 0.75% Libor floor and 101 soft call protection for six months, and the second-lien term loan debt still has a 0.75% Libor floor, a discount of 99 and hard call protection of 102 in year one and 101 in year two.

Antares Capital, Barclays, BMO Capital Markets, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., KKR Capital Markets, MUFG, Nomura Securities, RBC Capital Markets, Sumitomo Mitsui Banking Corp. and Stifel Nicolaus & Co. are the joint lead arrangers on the deal.

Recommitments were scheduled to be due at noon ET on Monday, the source added.

Proceeds will be used to help fund the buyout of the company by Bain Capital Private Equity from Gryphon Investors.

Closing is expected this quarter, subject to customary conditions, including regulatory approvals.

Dessert Holdings is a St. Paul, Minn.-based dessert company.

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