Tube City term loan B softens in secondary as parent company reveals buyout by Pritzker

By Sara Rosenberg

New York, Aug. 26 - Tube City IMS Corp.'s term loan B headed lower in trading on Monday after the company's parent, TMS International Corp., announced that it will be acquired by the Pritzker family.

The B loan was quoted at par bid, down from par ½ bid, 101 offered, a trader remarked.

Under the agreement, TMS is being purchased by certain members of the Pritzker family for $17.50 per share. The all-cash transaction is valued at about $1 billion, including refinanced third-party debt.

Funding for the transaction will come from a debt commitment provided by J.P. Morgan Securities LLC and Goldman Sachs Bank USA as well as equity.

TMS gets approval

Following the execution of the definitive merger agreement, Onex Corp. and certain of its affiliates, the holders of about 60% of the outstanding shares of TMS common stock, executed a written consent adopting and approving the agreement. No additional stockholder action is required.

Closing is expected in the fourth quarter, subject to expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions.

Through its subsidiaries, including Tube City, TMS is a Glassport, Pa.-based provider of outsourced industrial services to steel mills.

Allison closes

In other news, Allison Transmission Inc. completed its $1.139 billion senior secured term loan B-3 due Aug. 23, 2019 that is priced at Libor plus 275 basis points, according to an 8-K filed with the Securities and Exchange Commission.

The loan has a 25 bps step-down at 3.25 times total leverage, a 1% Libor floor and 101 soft call protection for six months. It was issued at par.

During syndication, the Libor floor firmed at the wide end of the 0.75% to 1% talk.

Citigroup Global Markets Inc. led the deal that was used to reprice the existing term loan B-3 from Libor plus 325 bps with a 1% Libor floor.

Allison Transmission is an Indianapolis-based automatic transmission company.

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