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Focus Brands to launch $141 million in add-on term loans on Friday
By Sara Rosenberg
New York, Nov. 29 - Focus Brands Inc. will hold a conference call on Friday to launch $141 million in first- and second-lien add-on term loans, according to a market source.
Credit Suisse Securities (USA) LLC is the lead bank on the deal.
The debt is comprised of a $91 million add-on first-lien term loan and a $50 million add-on second-lien term loan, the source said.
Pricing on the first-lien add-on, as well as on the existing loan, is Libor plus 500 basis points with a 1.25% Libor floor, and pricing on the second-lien loan, as well as on the existing loan, is Libor plus 900 bps with a 1.25% Libor floor.
Both the first- and second-lien add-ons are being offered at an original issue discount of 991/2, the source continued.
With this transaction, the 101 soft call protection on the existing first-lien term loan is being extended by six months to August 2013. This call premium will apply to the add-on as well.
The second-lien add-on will have the same call protection as the existing second-lien loan debt, which is 103 through February 2013, 102 for the following year and 101 for the year after that.
Proceeds from the new debt will be used to fund a dividend.
First-lien leverage is 4.5 times and total leverage is 6.5 times.
With the add-ons, the company is seeking an amendment to its existing credit facility to allow for the dividend and revise covenants.
Lenders are being offered a 10 bps amendment fee.
Commitments and consents are due next week, the source added.
Focus Brands is an Atlanta-based franchisor and operator of ice cream stores, bakeries, restaurants and cafes.
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