FeeCo sets price talk on $727.5 million of term loans with launch

By Sara Rosenberg

New York, Jan. 17 – FeeCo came out with price talk on its $517.5 million seven-year covenant-light first-lien term loan (B2/B-) and $210 million eight-year covenant-light second-lien term loan (Caa2/CCC) with its bank meeting on Wednesday, according to a market source.

The first-lien term loan is talked at Libor plus 450 basis points with a 0% Libor floor and an original issue discount of 99.5, and the second-lien term loan is talked at Libor plus 850 bps with a 0% Libor floor and a discount of 98.5, the source said.

Included in the first-lien term loan is 101 soft call protection for six months and the second-lien term loan has hard call protection of 102 in year one and 101 in year two.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Barclays, Jefferies LLC and CIBC are the lead arrangers on the $727.5 million of term loans.

Commitments are due at noon ET on Jan. 30, the source added.

FeeCo is formally borrowing the term loans via two indirect, wholly-owned domestic subsidiaries of Mayfield Holdings LLC.

Proceeds will be used to help fund the acquisition of 51% of FeeCo by Madison Dearborn Partners from AmTrust Financial Services Inc.

The transaction values FeeCo at $1.15 billion, plus up to an additional $50 million upon exit, subject to agreed thresholds.

Closing is expected in the first half of this year, subject to customary conditions and regulatory approvals.

FeeCo is an insurance-related fee revenue business.

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