First Student launches $2 billion of term loans at Libor plus 325 bps

By Sara Rosenberg

New York, June 28 – First Student & First Transit launched on Monday its $2.015 billion of senior secured first-lien term loans (//BB+) with price talk of Libor plus 325 basis points with a 0.5% Libor floor and an original issue discount of 99 to 99.5, according to a market source.

The debt consists of a $1.49 billion seven-year term loan B and a $525 million seven-year term loan C.

The term loans have 101 soft call protection for six months.

Barclays, Morgan Stanley Senior Funding Inc., BMO Capital Markets, TD Securities (USA) LLC, Credit Suisse Securities (USA) LLC, RBC Capital Markets, MUFG, BNP Paribas Securities Corp., Citizens Bank, Deutsche Bank Securities Inc., Stifel and Mizuho are the bookrunners on the deal.

Commitments are due at noon ET on July 14, the source added.

Proceeds from the term loan B will be used to help fund the buyout of the companies by EQT Infrastructure from FirstGroup plc for $4.6 billion, and proceeds from the term loan C will be placed in a specified restricted account for purposes of providing cash collateral against letters of credit.

Closing is expected this summer, subject to customary conditions.

First Student is a Cincinnati-based student transportation service provider. First Transit is a Cincinnati-based public transit management operator.

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