Forest City finalizes $1.25 billion term loan B at Libor plus 400 bps

By Sara Rosenberg

New York, Oct. 26 – Forest City Enterprises LP firmed pricing on its $1.25 billion seven-year covenant-light term loan B (B2/B+) at Libor plus 400 basis points, the high end of the Libor plus 375 bps to 400 bps talk, according to a market source.

Additionally, the company tightened the original issue discount on the term loan to 99.75 from 99.5, the source said.

The term loan still has a 0% Libor floor, 101 soft call protection for six months, and a ticking fee of half the margin from days 31 to 60 and the full margin thereafter.

Bank of America Merrill Lynch, TD Securities (USA) LLC, Barclays, BMO Capital Markets, CIBC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., RBC Capital Markets, Bank of Nova Scotia and US Bank are the arrangers on the deal.

Recommitments were scheduled to be due at 3:45 p.m. ET on Friday, the source added.

Proceeds will be used to help fund the acquisition of the company by Brookfield Asset Management Inc.

Under the agreement, Forest City is being bought for $25.35 per share in an all-cash transaction valued at $11.4 billion, including debt.

Closing is expected this quarter, subject to some conditions, including the approval of Forest City’s stockholders. The transaction is not contingent on financing.

Forest City is a Cleveland-based real estate company.

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