Foundation Building revises OIDs on first- and second-lien term loans

By Sara Rosenberg

New York, Oct. 7 – Foundation Building Materials LLC widened the original issue discount on its $245 million seven-year first-lien term B (B3/B+) to 95 from revised talk of 97 and initial talk of 99, and the discount on its $80 million eight-year second-lien term loan (Caa2/CCC+) to 94 from 97.5, according to a market source.

Also, pricing on the second-lien term loan was increased to Libor plus 1,050 basis points from talk of Libor plus 975 bps to 1,000 bps, the source said.

The second-lien term loan still has a 1% Libor floor and call protection of 102 in year one and 101 in year two.

Pricing on the first-lien term loan is Libor plus 625 bps with a 1% Libor floor, and the debt has 101 soft call protection for one year.

Earlier in syndication, the spread on the first-lien term loan was lifted from talk of Libor plus 550 bps to 575 bps and the call protection was extended from six months.

Other updates announced earlier in syndication included setting the MFN for life and adding a total leverage covenant step-down to 5 times in December 2017.

The company’s $375 million credit facility also provides for a $50 million ABL revolver.

RBC Capital Markets LLC, Credit Suisse Securities (USA) LLC, Jefferies Finance LLC and SunTrust Robinson Humphrey Inc. are the leads on the deal.

Proceeds will be used to help fund the buyout of the company by Lone Star Funds.

Foundation Building is a Tustin, Calif.-based building material company.

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