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Tomkins launches amendment to lower pricing on term loans A and B
By Sara Rosenberg
New York, Feb. 3 - Tomkins Ltd.'s lender call on Thursday afternoon was used to launch an amendment to its credit facility that would reduce term loan pricing and revise covenants, according to sources.
Under the proposal, pricing on the term loan A would reduce to Libor plus 300 basis points with a 1.25% Libor floor from Libor plus 425 bps with a 1.75% floor, and pricing on the term loan B would reduce to Libor plus 325 bps with a 1.25% floor from Libor plus 450 bps with a 1.75% floor, sources said.
Pricing on the company's revolver is being left unchanged.
In addition, the net total leverage ratio would be changed so that starting with the fourth quarter of 2012, it will be 5.25 times and stay there until maturity. Under the current terms, the ratio is 6.1 times at fourth quarter 2010 with a step-down to 3.25 times at the fourth quarter of 2014.
Also, the interest coverage ratio would become 2.1 times at the fourth quarter of 2012 and stay there through maturity. Under the current terms, the ratio is 1.8 times at the fourth quarter of 2010 with step-ups to 2.75 times over four years.
Lastly, the $400 million accordion feature would become available at a first-lien secured leverage ratio of 3.5 times, instead of at a ratio of 2.25 times, sources added.
Citigroup, Bank of America, Barclays Capital, RBC Capital Markets and UBS are leading the amendment.
Commitments are due on Feb. 10.
Existing lenders are getting paid the 101 soft call protection that the term loan B currently carries.
Tomkins is a Denver-based engineering and manufacturing group providing products for the industrial, automotive and building products markets.
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