WEX trims spread on $1.21 billion term loan B to Libor plus 350 bps

By Sara Rosenberg

New York, June 23 – WEX Inc. reduced pricing on its $1.21 billion seven-year term loan B to Libor plus 350 basis points from Libor plus 400 bps, according to a market source.

Also, the step-down was changed to Libor plus 325 bps when consolidated total leverage is less than or equal to 3.5 times from a step-down to Libor plus 375 bps at consolidated total leverage that was still to be determined, the source said.

In addition, the 101 soft call protection was extended to one year from six months and the 12 month MFN sunset was removed, setting the 50 bps MFN for the life of the deal.

Furthermore, the incremental allowance was revised to the greater of $375 million and 4 times total leverage from the greater of $450 million and 4 times total leverage, the source continued.

The term loan B still has a 0.75% Libor floor and an original issue discount of 99.

Bank of America Merrill Lynch, SunTrust Robinson Humphrey Inc., MUFG and Citizens Bank are the leads on the deal.

Recommitments were scheduled to be due at 2:30 p.m. ET on Thursday, the source added.

Allocations are expected on Friday.

Based on an 8-K filed with the Securities and Exchange Commission, the company is also expected to get a $470 million revolver, under which $200 million will be drawn, and a $445 million term loan A.

Proceeds from the $2,125,000,000 credit facility (Ba3/BB-) will be used to help fund the acquisition of Electronic Funds Source LLC, repay existing revolver borrowings of $219 million and repay an existing $452 million term loan A.

WEX is paying about $1.1 billion in cash and issuing 4 million shares of common stock to investment funds affiliated with Warburg Pincus, Electronic Funds Source’s current owner.

Total secured debt to adjusted EBITDA is 4.7 times and total debt to adjusted EBITDA is 4.7 times.

Closing on the acquisition is subject to regulatory approvals and other customary conditions.

Upon closing, investment funds affiliated with Warburg Pincus will become WEX’s largest shareholder.

WEX is a South Portland, Maine-based provider of corporate payment solutions. Electronic Funds Source is a provider of payments solutions.

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