Authentic Brands downsizes first- and second-lien loans, raises pricing

By Sara Rosenberg

New York, May 21 - Authentic Brands Group trimmed its seven-year first-lien term loan to $320 million from $335 million and its eight-year second-lien term loan to $105 million from $130 million, according to a market source.

Also, pricing on the first-lien term loan was lifted to Libor plus 450 basis points from Libor plus 400 bps and pricing on the second-lien term loan was increased to Libor plus 800 bps from Libor plus 750 bps, the source said.

In addition, the original issue discount on the first-lien term loan firmed at 99, the wide end of the 99 to 99½ talk, and the 101 soft call protection was extended to one year from six months.

As before, both term loans have a 1% Libor floor, and the second-lien term loan has a discount of 99 and call protection of 102 in year one and 101 in year two.

Other changes included increasing the excess cash flow sweep to 75% with step-downs from 50% with step-downs, removing the $80 million general accordion basket and setting the incremental subject to 3.75 first-lien net leverage and 5.5 times net secured leverage, and removing the $20 million available amount starter basket while adding a 5.5 times total net leverage incurrence test for utilization of the available amount builder basket.

Recommitments were due at 5 p.m. ET on Wednesday.

Bank of America Merrill Lynch, KeyBanc Capital Markets, Barclays and Canaccord are leading the now $425 million deal, down from $465 million.

Proceeds will be used to refinance existing debt, to redeem preferred stock, to fund a dividend and to purchase a minority interest in the Marilyn Monroe brand.

Due to the term loan downsizings, the dividend amount was reduced, the source added.

Authentic Brands is a New York-based brand development and licensing company.

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