Flint lifts first- and second-lien loan spreads, updates offer prices

By Sara Rosenberg

New York, May 1 - Flint Group increased pricing on its $860 million seven-year covenant-light first-lien term loan (B1/B+) and €625 million seven-year covenant-light first-lien term loan (B1/B+) to Libor/Euribor plus 375 basis points from Libor/Euribor plus 350 bps, according to a market source.

Also, pricing on the $205 million eight-year covenant-light second-lien term loan (Caa1/B-) and €150 million eight-year covenant-light second-lien term loan (Caa1/B-) was raised to Libor/Euribor plus 725 bps from Libor/Euribor plus 700 bps, the source said.

In addition, the original issue discount talk on the first-lien term loans was changed to 99 to 99½ from just 991/2, the discount talk on the U.S. second-lien term loan was revised to 99 to 99½ from 99¼ and the offer price talk on the euro second-lien term loan was modified to 99½ to par from 991/4, the source continued.

All of the term loans still have a 1% floor, the first-lien term debt still has 25 bps pricing step-down at 3.25 times net first-lien leverage and 101 soft call protection for six months, and the second-lien debt still has hard call protection of 102 in year one and 101 in year two.

The term loans have a ticking fee of the full spread starting on day 31 from allocation. This fee is not payable on cashless rolled commitments.

The company's credit facility also provides for a €150 million five-year revolver (B1/B+) that has a 50 bps commitment fee.

Included in the credit agreement is an incremental allowance of €320 million that was reduced from €450 million plus a ratio based test that was reduced to 3.6 times first-lien leverage for first-lien incurrence and 4.5 times net leverage for second-lien incurrence.

Other changes announced were the removal of the MFN sunset provision, the modification of the restricted payments unlimited ratio prong to 3.5 times from 4 times, the decrease of the consolidated EBITDA run rate add back timing qualifier to 18 months from 24 months, and the amendment of cash management to allow third-party cash management financial institutions to benefit from security, the source added.

Commitments remained due on Thursday.

Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc., Barclays and Goldman Sachs Bank USA are the lead banks on the deal, with Deutsche the left lead on the first-lien term loan and Morgan Stanley the left lead on the second-lien loan.

Proceeds will be used to help fund the acquisition of the company by Goldman Sachs Merchant Banking Division and Koch Equity Development LLC from CVC Capital Partners.

Flint is a Luxembourg-based supplier of inks and other print consumables.

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