Oldcastle ups term loan to $1.69 billion, firms at SOFR plus 450 bps

By Sara Rosenberg

New York, April 14 – Oldcastle BuildingEnvelope (Oscar AcquisitionCo LLC) upsized its seven-year senior secured covenant-lite first-lien term loan B to $1.685 billion from $1.285 billion and finalized pricing at SOFR+10 basis points CSA plus 450 bps, the wide end of the 425 bps to 450 bps talk, according to a market source.

Also, the 25 bps step-down at 4.25x first-lien net leverage and 25 bps post initial public offering step-down were removed, the original issue discount talk was revised to a range of 96 to 96.5 from 97, and then finalized at 96.5, and the 101 soft call protection was extended to one year from six months, the source said.

In addition, MFN was changed to 50 bps with a 24-month sunset from 75 bps with a 12-month sunset, asset sale step-downs were removed, and reporting requirements were set at 150 days for annuals/75 days for quarterlies during the first audit period and 90 days for annuals/45 days for quarterlies thereafter.

Incremental debt was revised to the sum of 75% of consolidated EBITDA plus additional amounts subject to 4.75x first-lien net leverage, 4.75x senior net leverage and 6.4x total net leverage, the interest coverage ratio prong was removed from the junior lien and unsecured debt prong, the “no worse” prongs and corresponding disregarded amount concept were removed, the ability to reallocate general debt was removed, and the inside maturity was changed to 50% of consolidated EBITDA from 100% of consolidated EBITDA, the source continued.

The general restricted payment basket was modified to 35% of consolidated EBITDA from 50% of consolidated EBITDA, the ratio-based restricted payment was changed to unlimited subject to 5.4x total net leverage from unlimited subject to 5.75x total net leverage and an EOD blocker was added, the general investments basket was revised to 50% of consolidated EBITDA from 100% of LTM EBITDA plus available restricted payment capacity amount plus amounts allocated from the general RDP basket and the unrestricted subsidiaries basket, and ratio-based investments was changed to unlimited subject to 5.4x total net leverage from either less than 6.5x total net leverage or total net leverage accretive and the “no worse” prong was removed.

Furthermore, EBITDA adjustments was revised to reduce the look forward to 24 months, add a 25% cap on cost savings EBITDA addback, remove “run-rate” revenue adjustments and remove Project ONE savings.

The term loan still has a 0.5% floor.

Citigroup Global Markets Inc., JPMorgan Chase Bank, BNP Paribas Securities Corp., Mizuho, Macquarie Capital (USA) Inc., Goldman Sachs Bank USA, MUFG and Stifel are the joint lead arrangers on the deal. Citi is the administrative agent.

Recommitments were scheduled to be due at 10 a.m. ET on Thursday, the source added.

Proceeds will be used to help fund the buyout of the company by KPS Capital Partners LP from CRH plc for an enterprise value of $3.8 billion. The consideration, payable on closing, includes cash of $3.45 billion together with a transfer of lease liabilities of $350 million.

Other funds for the transaction will come from $585 million of senior unsecured notes. A $400 million senior secured notes offering was cancelled with the term loan upsizing.

Closing is expected this quarter, subject to customary conditions and regulatory approvals.

Oldcastle BuildingEnvelope is a supplier of value-added, glazing-focused, interior and exterior products and services.

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