Varsity Brands amendment to permit dividend, reset incremental amount

By Sara Rosenberg

New York, Oct. 19 –Varsity Brands, Inc. is seeking an amendment to its credit agreement along with its add-on term loans that will allow for a one-time shareholder distribution of about $245 million and reset the fixed incremental amount to the starting level of $190 million, according to a market source.

The amendment will also waive any required excess cash flow sweep for the 2016 fiscal year, the source said.

Lenders are being offered a 25 basis point consent fee.

Consents are due at 4 p.m. ET on Tuesday, the source added.

As previously reported, the company came to market earlier this week with a fungible $95 million senior secured add-on first-lien term loan B (B1/B) due December 2021 that is talked at Libor plus 400 bps with a 1% Libor floor and an original issue discount of 99.5.

The add-on first-lien term loan has 101 soft call protection for six months and amortization of 1% per annum.

Commitments for the add-on first-lien term loan are due at 5 p.m. ET on Tuesday.

Goldman Sachs Bank USA, Barclays and Jefferies Finance LLC are the bookrunners on the deal.

The company is also getting a $95 million add-on second-lien term loan that was privately placed.

Proceeds from the add-on term loans and cash on hand will be used to fund a distribution to existing equity holders.

Varsity Brands is a Memphis, Tenn.-based provider of school sports, cheerleading and achievement-related products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.