Tech Data tightens $1.5 billion ABL term loan OID to 98.5

By Sara Rosenberg

New York, June 25 – Tech Data Corp. changed the original issue discount on its $1.5 billion covenant-lite ABL term loan (Ba1/BBB-/BBB-) to 98.5 from talk in the range of 97 to 98, according to a market source.

Pricing on the ABL term loan remained at Libor plus 350 basis points with a 0% Libor floor.

The company’s $5 billion of five-year credit facilities also include a $3 billion ABL revolver (Ba1/BBB-/BBB-) and a $500 million covenant-lite FILO ABL term loan (Ba2/BBB-/BBB-).

Pricing on the revolver can range from Libor plus 125 bps to 175 bps subject to a grid based on availability.

Price talk on the FILO term loan is Libor plus 550 bps with a 0% Libor floor and a discount of 96 to 97.

The ABL term loan has 101 soft call protection for six months, and the FILO term loan has 101 soft call protection for one year.

Security is a perfected first priority interest in receivables, inventory and related proceeds thereof of the borrowers and guarantors, excluding inventory to the extent inventory of any borrower or any guarantor is not included in the borrowing base.

Amortization on the ABL term loan and FILO term loan is 1% per annum.

Commitments continued to be due at 5 p.m. ET on Thursday, the source added.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Barclays, RBC Capital Markets, Credit Suisse Securities (USA) LLC, MUFG, Mizuho, Goldman Sachs Bank USA, Deutsche Bank Securities Inc., BNP Paribas Securities Corp., Nomura and PNC Capital Markets are the leads on the deal, with Citigroup the left lead on the ABL term loan and JPMorgan the left lead on the FILO term loan. Citigroup is the administrative agent.

Proceeds will be used to help fund the buyout of the company by Apollo Global Management Inc. for $130 per share in a transaction with an enterprise value of $5.4 billion.

The company said in filings with the Securities and Exchange Commission that it is also planning $3.2 billion of equity for the buyout.

Lenders should be prepared for the transaction to close on or after June 30.

Tech Data is a Clearwater, Fla.-based distributor of IT products.

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