Flow Control carves funded tranche out of first-lien term loan

By Sara Rosenberg

New York, July 27 – Flow Control Group (FCG Acquisitions Inc.) opted to split its $120 million first-lien term loan (B2/B-) due April 1, 2028 into a $35 million funded piece and an $85 million 18-month delayed-draw piece, instead of having the whole amount as delayed-draw, according to a market source.

Like the existing term loans, pricing on the first-lien term loan debt is Libor plus 375 basis points with a 25 bps step-down at 5.9x total net leverage and upon an initial public offering, and a 0.5% Libor floor, and pricing on its fungible upon draw $50 million 18-month delayed-draw second-lien term loan (Caa2/CCC) due April 1, 2029 is Libor plus 675 bps with a 25 bps step-down upon an initial public offering and a 0.5% Libor floor.

The first-lien term loan debt still has an original issue discount of 99.5 and 101 soft call protection until Oct. 1, and the delayed-draw second-lien term loan still has a discount of 99 and the same 102, 101 call protection as the existing second-lien term loan.

Delayed-draw ticking fees remained at half the spread from days 61 to 120 and the full spread thereafter.

Incurrence is subject to 5.5x first-lien net leverage for first-lien draws and 6.5x senior secured net leverage for second-lien draws, the source continued.

Credit Suisse Securities (USA) LLC, UBS Investment Bank, KKR Capital Markets and SPC are the lead arrangers on the deal, with Credit Suisse the left lead on the first-lien loan and UBS the left lead on the second-lien loan.

Recommitments were scheduled to be due at noon ET on Tuesday, the source added.

Proceeds will be used for working capital and other general corporate purposes.

Flow Control is a Charlotte, N.C.-based distributor and technical adviser for mission critical flow control and industrial automation products and related services.

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