American Tire modifies offer price; US Farathane, Mitchell International ready launches

By Sara Rosenberg

New York, Jan. 16 – In the primary leveraged loan market on Friday, American Tire Distributors Inc. revised the original issue discount on its incremental term loan, and US Farathane Corp. and Mitchell International Inc. joined the near-term calendar.

American Tire Distributors changed the original issue discount on its $140 million non-fungible covenant-light secured term loan due June 1, 2018 to 98¼ from 98, according to a market source.

Pricing on the loan remained at Libor plus 475 basis points with a step-down to Libor plus 450 bps at total net leverage of 4 times and a 1% Libor floor, and there is still 101 hard call protection until March 28, 2015.

Bank of America Merrill Lynch is leading the deal that will be used with funds from an initial public offering of common stock to redeem 11½% senior subordinated notes due 2018 and for general corporate purposes.

In connection with the new term loan, American Tire is amending its existing term loan to revise the step-down to Libor plus 450 bps to take effect at total net leverage of 4 times instead of at 4.5 times and to change the secured debt incurrence test to 4.5 times net secured leverage from 4 times.

Current pricing of Libor plus 475 bps on the existing term will be unchanged with the amendment.

Lenders are offered a 25 bps amendment fee.

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