Kronos extends $464 million of first-lien, $328 million second-lien

By Sara Rosenberg

New York, Dec. 23 - Kronos Inc. pushed out the maturity on $464 million of its $635 million first-lien term loan B and $328 million of its $355 million second-lien term loan, according to a market source.

Pricing on the extended first-lien loan due June 2017 is Libor plus 475 bps, after a flex from Libor plus 450 bps, and there is 101 soft call protection for one year that was added during syndication.

The non-extended first-lien term loan due June 2014 is priced at Libor plus 225 bps based on pro forma total leverage of 5.6 times.

As for the extended second-lien loan due June 2018, that is priced at Libor plus 1,000 bps at leverage of greater than 5.0 times and Libor plus 900 bps at leverage of 5.0 times, after flexing up from Libor plus 825 bps.

The extended second-lien loan has hard call protection of 103 in year one, 102 in year two and 101 in year three, which had recently been revised from just 102 in year one and 101 in year three.

The non-extended second-lien term loan due June 2015 is priced at Libor plus 575 bps.

The company is also extending a portion of its $60 million revolver by three years to June 2017at pricing of Libor plus 475 bps, after flexing earlier from initial talk of Libor plus 450 bps.

Non-extended revolver pricing is Libor plus 200 bps.

As was previously reported, with the amendment and extension, Kronos is getting a new $370 million incremental first-lien term loan B (B1/B) due December 2018 that is priced at Libor plus 500 bps, after flexing from Libor plus 475 bps, with a 1.25% Libor floor. The debt was sold at an original issue discount of 98 and includes 101 soft call protection for one year.

Proceeds from the incremental debt will be used to fund a distribution to shareholders.

The first- and second-lien debt has a restricted payments provision under which the company can pay dividends if the total leverage ratio is less than 4.0 times and an excess cash flow sweep of 50% with a step-down to 0% at 4½ times leverage.

Also, non-extended first-lien term loan B has a 25 bps most favored nation provision against future amendments and extensions, and the incremental term loan B has a 25 bps most favored nation provision as well.

First-lien lenders are getting 25 bps for amendment consents and 25 bps for extensions, and second-lien lenders are getting 25 bps for consents and 75 bps for extensions.

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, Jefferies & Co. and Deutsche Bank Securities Inc. are leading the deal.

Closing is expected to occur on Dec. 28.

Kronos is a Chelmsford, Mass.-based provider of workforce management software.

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