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Trico Group to launch $335 million of term loans on Wednesday
By Sara Rosenberg
New York, Feb. 5 – Trico Group LLC is scheduled to hold a bank meeting at 2:30 p.m. ET in New York on Wednesday to launch $335 million of term loans, according to a market source.
Credit Suisse Securities (USA) LLC and FTI Capital Advisors are the leads on the deal.
The debt consists of a $235 million incremental first-lien term loan due February 2024 and a $100 million second-lien term loan due February 2025, the source said.
Price talk on the incremental first-lien term loan is Libor plus 675 basis points to 700 bps with a 1% Libor floor and an original issue discount of 96 plus a 1% fee, and talk on the second-lien term loan is Libor plus 900 bps cash plus 2% PIK with a 1% Libor floor, the source continued.
Original issue discount talk on the second-lien term loan is still to be determined.
The incremental first-lien term loan has hard call protection of 102 in year one and 101 in year two and amortization of 2.5% per annum that steps up to 5% per annum.
Call protection on the second-lien term loan is 103 in year one, 102 in year two and 101 in year three.
Covenants include a total net leverage ratio of 5.25 times with step-downs.
Expected first-lien term loan ratings are B3/B.
Commitments are due at 5 p.m. ET on Feb. 20.
Proceeds will be used to fund the acquisition of Fram Group.
With this transaction, lenders to the existing $464 million first-lien term loan are being offered the option to exchange the existing debt into a new tranche that is talked at Libor plus 675 bps to 700 bps for fungibility and are being offered a 1% roll fee, the source added.
Whatever is not exchanged under the existing first-lien term loan will remain outstanding as is.
Current pricing on the existing first-lien term loan is Libor plus 650 bps with a 1% Libor floor.
Trico is a Rochester Hills, Mich.-based manufacturer of automotive aftermarket products.
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