American Capital talks $600 million term B at Libor plus 475-500 bps

By Sara Rosenberg

New York, July 24 - American Capital Ltd. launched on Tuesday afternoon its $600 million four-year term loan B with price talk of Libor plus 475 basis points to 500 bps with a 1.25% Libor floor and an original issue discount of 99, according to a market source.

There is 101 soft call protection for one year.

Amortization is 25% per annum.

Commitments for the term loan are due on Aug. 3.

The company is targeting to allocate and close on Aug. 10.

Expected ratings are B2/B, the source added.

In addition to the term B, the $750 million credit facility includes a $150 million four-year revolver that has no amortization in first three years, then amortizes at a rate of 8.33% per month in year four, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

Price talk on the revolver is Libor plus 375 bps with a 50 bps unused fee.

The revolver and term loan both have a 1.0 times minimum borrowing base coverage covenant, and the revolver has a 0.75 times maximum leverage ratio.

J.P. Morgan Securities LLC, BMO Capital Markets Corp. and UBS Securities LLC are the joint lead arrangers on the deal.

Proceeds will be used to refinance basically all of the company's existing recourse debt and for working capital and general corporate purposes.

American Capital is a Bethesda, Md.-based private equity firm and global asset manager.

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