Therapy Brands firms first-lien term loans at Libor plus 400 bps

By Sara Rosenberg

New York, May 12 – Therapy Brands Holdings LLC set pricing on its $235 million seven-year first-lien term loan (B2/B-) and $60 million delayed-draw first-lien term loan (B2/B-) with a 24-month commitment period at Libor plus 400 basis points, the low end of the Libor plus 400 bps to 425 bps talk, according to market source.

As before, the first-lien term loans, which were sold as a strip, have a 25 bps step-down at 4.55x first-lien leverage, a 0.75% Libor floor and an original issue discount of 99.5.

The first-lien term loan has 101 soft call protection for six months, and ticking fees on the delayed-draw first-lien term loan are half the margin from days 61 to 120 and the full margin thereafter.

The company’s $470 million of senior secured credit facilities also include a $40 million five-year revolver (B2/B-), a $95 million eight-year second-lien term loan (Caa2/CCC) and a $40 million delayed-draw second-lien term loan (Caa2/CCC) with a 24-month commitment period.

Pricing on the second-lien term loan debt, which was sold as a strip, is Libor plus 675 bps with a 0.75% Libor floor and an original issue discount of 99.

The second-lien term loan has soft call protection of 102 in year one and 101 in year two, and the delayed-draw second-lien term loan has a ticking fee of 75 bps starting on day 61.

Earlier in syndication, the funded second-lien term loan was upsized from $85 million and the delayed-draw second-lien term loan was upsized from $20 million.

Jefferies LLC, KKR Capital Markets, Societe Generale and Stone Point are the arrangers on the deal, with Jefferies the left lead on the first-lien and KKR the left lead on the second-lien.

Proceeds will be used to help fund the buyout of the company by KKR from Lightyear Capital LLC, Oak HC/FT and Greater Sum Ventures.

Therapy Brands is a Birmingham, Ala.-based provider of integrated practice management software and payment solutions to the mental health, behavioral health and rehabilitation markets.

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