Franchise Group talks $200 million term loan at SOFR plus 475 bps

By Sara Rosenberg

New York, Jan. 25 – Franchise Group Inc. launched on Wednesday its non-fungible $200 million add-on first-lien term loan (B1/B+) due March 10, 2026 with price talk of SOFR+CSA plus 475 basis points with a 0.75% floor and an original issue discount of 94 to 95, according to a market source.

CSA is 11.4 bps one-month rate, 26.2 bps three-month rate and 42.8 bps six-month rate, the source said.

The add-on term loan has 101 soft call protection for six months, amortization of 1% per annum, 50 basis points MFN with a 12-month sunset, a 3.75x maximum total net leverage covenant and a 1.5x minimum fixed charge coverage ratio covenant.

JPMorgan Chase Bank is the lead arranger on the deal.

Commitments are due on Monday, with allocations expected on Tuesday.

Proceeds will be used to repay ABL credit facility borrowings.

Pro forma secured net leverage is expected to be 2.49x, and total net leverage is expected to be 3.22x.

Franchise Group is a Delaware, Ohio-based owner and operator of franchised and franchisable businesses.

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