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Fort Dearborn shifts funds between first- and second-lien term loans
By Sara Rosenberg
New York, Oct. 7 – Fort Dearborn Co. (Fortress Merger Sub Inc.) upsized its seven-year covenant-light first-lien term loan to $480 million from $455 million and downsized its eight-year covenant-light second-lien term loan to $145 million from $170 million, according to a market source.
Additionally, pricing on the first-lien term loan was lowered to Libor plus 400 basis points from Libor plus 450 bps and pricing on the second-lien term loan was reduced to Libor plus 850 bps from talk of Libor plus 875 bps to 900 bps, the source said.
Furthermore, the original issue discount on the first-lien term loan was changed to 99.5 from 99.
Other changes included removing the pricing step-downs from both term loans, eliminating the MFN sunset and setting the MFN provision to apply to all aspects of the incremental, the source continued.
As before, both term loans have a 1% Libor floor, the first-lien term loan has 101 soft call protection for six months, and the second-lien term loan has a discount of 98.5 and call protection of 102 in year one and 101 in year two.
Recommitments were due by 11 a.m. ET on Friday.
Deutsche Bank Securities Inc., Citigroup Global Markets Inc., RBC Capital Markets LLC and Credit Suisse Securities (USA) LLC are the bookrunners on the $625 million in term loans.
Proceeds will be used to help fund the buyout of the company by Advent International from KRG Capital Partners.
Fort Dearborn’s management team will retain a minority stake in the company and continue to lead the business following the completion of the transaction.
Closing is expected this quarter, subject to customary conditions.
Fort Dearborn is an Elk Grove, Ill.-based supplier of high-impact prime labels for the consumer goods industry.
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