First Student flexes $2 billion of term loans to Libor plus 300 bps

By Sara Rosenberg

New York, July 13 – First Student & First Transit reduced pricing on its $1.49 billion seven-year senior secured first-lien term loan B and $525 million seven-year senior secured first-lien term loan C to Libor plus 300 basis points from Libor plus 325 bps, according to a market source.

Also, the original issue discount on the term loans firmed at 99.5, the tight end of the 99 to 99.5 talk, and some changes were made to documentation, the source said.

The term loans still have a 0.5% Libor floor and 101 soft call protection for six months.

The company’s $2.515 billion of senior secured credit facilities (Ba3/B+/BB+) include a $500 million revolver as well.

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.

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

Proceeds from the term loan B and $800 million of senior secured notes 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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