Tecomet tightens talk on $540 million first-lien loan; commitments due Thursday

By Paul A. Harris

Portland, Ore., April 12 – After moving up the deadline on its $540 million seven-year first-lien term loan on Tuesday, Tecomet (TecoStar Holdings Inc.) tightened spread talk and cut discount talk on Wednesday, according to a market source.

New talk has the loan coming with an interest rate of Libor plus 375 basis points, decreased from 400 bps. There is a step-down to 350 bps if net leverage falls to 4.0 times, which would represent a 0.5 times decrease from the closing level.

The spread will float atop a 1% Libor floor.

The discount is decreased to half a point, or 99.5, from the previous full point of discount talk.

There is 50 bps of MFN for the life of the loan, decreased from 75 bps, with 18 months of sunset talk.

With the revisions the commitment deadline is moved back five hours, to 5 p.m. ET on Thursday, from the earlier noon deadline. When the deal was launched it was expected to be in the market until April 17.

The company’s $835 million credit facilities also include a $70 million ABL revolver and a $225 million pre-placed second-lien term loan.

Jefferies Finance LLC, Antares Capital and KKR Capital are the leads on the deal.

Proceeds will be used to help fund the buyout of the company by Charlesbank Capital Partners.

First-lien leverage is 4.5 times, and total leverage is 6.4 times.

Tecomet is a Wilmington, Mass.-based provider of high precision manufacturing solutions serving global medical device and aerospace and defense original equipment manufacturers.

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