Milk Specialties reveals price talk on terms loans with launch

By Sara Rosenberg

New York, Nov. 1 - Milk Specialties Global released price talk on its first- and second-lien term loans as the debt launched with a bank meeting on Tuesday afternoon, according to a market source.

The $145 million first-lien term loan (B+) is being talked at Libor plus 650 basis points with a 1.5% Libor floor and an original issue discount of 97 to 98, and the $60 million second-lien term loan (CCC+) is being talked at Libor plus 1,050 bps with a 1.5% floor and a discount of 96 to 97, the source said.

The second-lien term loan is non-callable for one year, then at 102 in year two and 101 in year three.

Early unofficial guidance was circulating on the first-lien term loan at Libor plus 650 bps with a 1.5% Libor floor and a discount of 97 and on the second-lien term loan at Libor plus 1,050 bps with a 1.5% floor and a discount of 96.

The company's $230 million credit facility also includes a $25 million revolver (B+).

RBC Capital Markets LLC is the lead bank on the deal.

Proceeds will be used to help fund the buyout of the company by HM Capital from Stonehenge Partners Inc.

Leverage through the first lien is 3.7 times and through the second lien is 5.2 times.

Milk Specialties is a Carpentersville, Ill.-based manufacturer of nutrition products.

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