TASC ups first-lien term loan to $395 million, widens OID to 98½

By Sara Rosenberg

New York, May 7 - TASC Inc. upsized its six-year first-lien term loan (B1/B+) to $395 million from a revised amount of $393 million but it is still coming smaller than its originally planned size of $432 million, according to a market source.

In addition, the original issue discount on the first-lien term loan was changed to 98½ from 99, the source said.

Furthermore, the first-lien term loan is now non-callable for one year, then there is hard call protection of 101 for a year, compared to previous talk of 101 soft call protection for one year. The hard call protection does not apply to mandatory amortization payments, excess cash flow payments and asset sale payments.

Pricing on the first-lien term loan is still Libor plus 550 basis points with a 1% Libor floor.

The company's now $695 million senior secured credit facility, up from a revised size of $693 million and an initial size of $682 million, also includes a $50 million five-year revolver (B1/B+) and a $250 million seven-year second-lien term loan (Caa2/CCC+).

Pricing on the second-lien term loan is a fixed rate of 12% with no floor and an original issue discount of 98, and the debt is non-callable for one year, then at 105 in year two and 102.5 in year three.

Earlier in syndication, the second-lien term loan upsized from $200 million, the offer price was revised from par and the call protection was changed from 102 in year one and 101 in year two. Also, a total net leverage covenant was added to the first-and second-lien tranches, taking away their covenant-light status.

Recommitments were due by 5 p.m. ET on Wednesday, the source added.

Barclays and KKR Capital are leading the deal.

Proceeds will be used to refinance an existing credit facility.

Net senior secured leverage is 3.6 times and net total leverage is 5.8 times.

At first, the company launched an amendment and extension of its existing non-covenant-light credit facility, but that was shifted last month to plans for the new credit facility.

The amendment and restatement would have extended the $632 million term B by two years to Dec. 18, 2017 and raised pricing to Libor plus 525 bps with a 1.25% Libor floor from Libor plus 325 bps with a 1.25% Libor floor. It also would have extended the revolver by two years to Sept. 18, 2017 and reduced the size to $50 million from $80 million.

TASC is a Chantilly, Va.-based provider of advanced systems engineering and technical assistance to the defense, intelligence, federal and homeland security markets.

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