Flint Group sets offer prices on first- and second-lien term loans

By Sara Rosenberg

New York, May 2 - Flint Group firmed the original issue discount on its $860 million seven-year covenant-light first-lien term loan (B1/B+) at 99 and on its €625 million seven-year covenant-light first-lien term loan (B1/B+) at 991/2, compared to revised talk on both tranches of 99 to 99½ and initial talk of 991/2, according to a market source.

Also, the original issue discount on the $205 million eight-year covenant-light second-lien term loan (Caa1/B-) finalized at 991/4, the midpoint of revised talk of 99 to 99½ and in line with initial talk of 991/4, and the offer price on the €150 million eight-year covenant-light second-lien term loan (Caa1/B-) came at par, the low end of revised talk of 99½ to par and tighter than initial talk of 991/4, the source said.

Pricing on the first-lien term loans is Libor/Euribor plus 375 basis points, after recently flexing from Libor/Euribor plus 350 bps, and pricing on the second-lien term loans is Libor/Euribor plus 725 bps, after recently increasing from Libor/Euribor plus 700 bps.

As initially proposed, all of the term loans have a 1% floor, the first-lien term debt has a 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 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 recently cut 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 earlier in the syndication process 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.

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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