R.R. Donnelley prices five-year $1.25 billon term loan B at SOFR plus 725 bps

By Wendy Van Sickle

Columbus, Ohio, March 8 – R.R. Donnelley & Sons Co. announced it priced a five-year $1.25 billon senior secured term loan B at adjusted term SOFR plus a margin of 725 basis points with a 0.75% floor.

The margin is subject to a step-down of 50 bps if the company’s first priority secured leverage ratio is no greater than 2 times and an additional step-down of 50 bps if the ratio is below 1.5 times, according to a news release.

The loan is expected to be issued at 97.

The loan will be guaranteed by the company’s wholly owned domestic subsidiaries and secured by a first priority lien on, among other things, the company’s material owned real estate assets, intellectual property and the equity interests of certain subsidiaries that also secure the company’s existing 6 1/8% senior secured notes due 2026.

The new term loan will also be secured by a second priority lien on the accounts receivable, inventory and other assets that secure the company’s asset-based lending facility on a first priority basis.

The company plans to use proceeds of the term loan with up to $5 million of cash on hand and/or borrowings under the ABL facility to refinance its existing term loan B, fully redeem its 6˝% senior notes due 2023 and 6% senior notes due 2024 and make a dividend to its indirect parent, RRD Parent, Inc., to permit such parent to use the proceeds of such dividend to redeem a portion of its outstanding 10% senior notes due 2031.

R.R. Donnelley is a Chicago-based provider of multichannel business communications services and marketing solutions.

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