Infrastructure & Energy revises $300 million term loan pricing, terms

By Sara Rosenberg

New York, Nov. 5 – Infrastructure & Energy Alternatives Inc. increased pricing on its $300 million six-year first-lien term loan (B+) to Libor plus 625 basis points from talk in the range of Libor plus 550 bps to 575 bps and eliminated the leverage-based pricing step-down, according to a market source.

In addition, the original issue discount on the term loan was changed to 96.5 from 99, the 101 soft call protection was extended to one year from six months and amortization was lifted to 10% per annum from 1% per annum, the source said.

Also, the first-lien net leverage covenant was revised to 3.5 times, stepping down to 2.25 times on Dec. 31, 2020, from 4 times, stepping down to 2.8 times on the second anniversary of closing.

The excess cash flow sweep was modified to 75%, stepping down to 50%, 25% and 0% at 1.76 times, 1.26 times and 0.76 times leverage, respectively, from 50%, stepping down to 25% and 0% at 1.58 times and 1.08 times leverage, respectively.

The incremental was changed to $80 million with the grower eliminated and the unlimited ratio set at 2.42 times, which is 0.25 times inside closing leverage, from $122.5 million and 100% consolidated EBITDA and an unlimited ratio set at closing leverage.

Furthermore, the 50 bps MFN was set for life for all pari passu term loans, instead of for 12 months, and the carve-outs for outside maturity and permitted acquisitions were removed.

The restricted payments general basket was changed to the greater of $15 million and 11% of consolidated EBITDA from the greater of $20 million and 15% of consolidated EBITDA, and the preferred stock redemption basket incurrence ratio was revised to 1.67 times from closing leverage, the source continued.

Asset sale is 100% with the step-down to 50% at 1.08 times leverage eliminated.

The general debt basket was modified to the greater of $20 million and 17% of consolidated EBITDA from the greater of $30 million and 25% consolidated EBITDA, and the non-credit party debt basket was changed to the greater of $20 million and 17% of consolidated EBITDA from the greater of $30 million and 25% consolidated EBITDA.

And, lender calls are now required quarterly instead of annually.

The term loan still has a 0% Libor floor.

The company’s $375 million of credit facilities also include a $75 million five-year revolver.

Jefferies LLC and KeyBanc Capital Markets are the arrangers on the deal.

Commitments are due at 4 p.m. ET on Thursday, the source added.

Net leverage is 2.67 times.

Proceeds are being used to fund the acquisitions of Consolidated Construction Solutions I LLC for $145 million and William Charles Construction Group for about $90 million, including $85 million in cash and $5 million in equity.

Infrastructure & Energy is an Indianapolis-based infrastructure construction company with specialized energy and heavy civil experience.

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