Federal-Mogul ups term B to $700 million, cuts term C to $1.9 billion

By Sara Rosenberg

New York, April 3 - Federal-Mogul Corp. upsized its four-year term loan B to $700 million from $500 million and downsized its seven-year term loan C to $1.9 billion from $2.1 billion, according to a market source.

Also, pricing on the term loan B firmed at Libor plus 300 basis points, the low end of the Libor plus 300 bps to 325 bps talk, and pricing on the term loan C finalized at Libor plus 375 bps, the wide end of the Libor plus 350 bps to 375 bps talk.

As before, the term loan B has a 1% Libor floor and an original issue discount of 993/4, and the term loan C has a 1% Libor floor and a discount of 991/2.

Both term loans have 101 soft call protection for one year, which was extended the other day from six months.

When the call protection was changed, the incremental allowance was revised to no freebie and unlimited subject to 3.75 times net secured leverage with a $500 million cash cap, from having a $500 million freebie, and the 18-month MFN sunset provision was removed. There is a 50 bps MFN.

Furthermore, restricted payments had been changed to a $150 million starter basket plus an available amount builder subject to a minimum ABL availability test and 3.5 times total net leverage, modified from having no total net leverage test.

Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC are the lead banks on the $2.6 billion in covenant-light term loan (B1/B), with Citi the left lead on the term loan B and Credit Suisse the left lead on the term loan C.

Proceeds will be used to refinance the company's existing term loans.

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

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