Forming Machining shifts funds between first- and second-lien loans

By Sara Rosenberg

New York, Oct. 5 – Forming Machining Industries Holdings LLC upsized its covenant-light first-lien term loan to $260 million from $245 million and downsized its covenant-light second-lien term loan to $60 million from $75 million, according to a market source.

In addition, pricing on the first-lien term loan was increased to Libor plus 425 basis points from talk in the range of Libor plus 375 bps to 400 bps and a step-down was added to Libor plus 400 bps based on leverage, and pricing on the second-lien term loan was lifted to Libor plus 825 bps from talk in the range of Libor plus 775 bps to 800 bps, the source said.

As before the first-lien term loan has a 0% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, and the second-lien term loan has a 0% Libor floor, a discount of 99 and call protection of 102 in year one and 101 in year two.

The company’s $370 million of credit facilities also include a $50 million revolver.

Antares Capital and SunTrust Robinson Humphrey Inc. are the joint lead arrangers on the deal.

Proceeds will be used to fund the acquisition of Atlas Group, a Wichita, Kan.-based manufacturer of flight critical, complex assemblies for a wide range of commercial, business and military aircraft.

Forming Machining, an AE Industrial Partners portfolio company, is a Park City, Kan.-based manufacturer of large, complex assemblies primarily for commercial aircraft.

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