Reddy Ice cuts spread on first- and second-lien term loans

By Paul A. Harris

Portland, Ore., March 27 - Reddy Ice Corp. tightened talk on its $225 million six-year covenant-light first-lien term loan (B1/B) and its $120 million 61/2-year covenant-light second-lien term, a market source said on Wednesday.

The first-lien term loan is now talked at Libor plus 550 basis points, reduced from 550 to 575 bps. The discount was also cut to by 50 cents, taking it to 99 from 98.5.

Pricing on the second-lien loan was cut to Libor plus 950 bps, reduced from earlier spread talk of 950 to 975 bps. The discount remains unchanged at 98.

Both tranches feature 1.25% Libor floors.

The call structure of the second lien loan was also changed. It now has a 101 one-year hard call, revised from the previous 103, 102, 101 call structure.

The company's $395 million credit facility also provides for a $50 million five-year revolver.

Commitments were due by the Wednesday close.

J.P. Morgan Securities LLC and Jefferies Finance LLC are the lead banks on the deal.

Proceeds will be used to refinance existing debt and for general corporate purposes.

Reddy Ice is a Dallas-based manufacturer and distributor of packaged ice products.

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