Federal-Mogul launches $1.75 billion term B at Libor plus 350-375 bps

By Sara Rosenberg

New York, June 11 - Federal-Mogul Corp. launched on Tuesday its $1.75 billion seven-year covenant-light term loan B with price talk of Libor plus 350 basis points to 375 bps with a 1% Libor floor and an original issue discount of 991/2, according to a market source.

The B loan has 101 soft call protection for six months and amortization of 1% per annum, the source said.

There is an incremental allowance of $500 million plus an amount such that, on a pro forma basis, total net secured leverage is 2.75 times or less, subject to 50 bps MFN with 24 months sunset provision, the source continued.

The company's $2.3 billion senior secured credit facility also includes a $550 million asset-based revolver.

Commitments are due June 19.

Citigroup Global Markets Inc. is the lead bank on the deal.

Proceeds will be used to refinance existing debt.

Other funds for the refinancing are expected to come from $750 million of senior notes.

Federal-Mogul is a Southfield, Mich.-based supplier of powertrain and safety technologies.

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