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Asurion eyes expanded $2.715B leveraged loan to refinance term debt

Asurion has expanded its first-lien term loan execution to up to $2.715 billion as the issuer now seeks to refinance its B-1 term loan via the new longer-dated seven-year B-4 loan, sources said.

Arrangers Bank of America Merrill Lynch, Morgan Stanley, Barclays, Credit Suisse, Deutsche Bank, and Goldman Sachs launched the covenant-lite as a $700 million, seven-year first-lien term loan, talked at L+400, with a 1% LIBOR floor, and offered at 99.5, alongside a $450 million fungible add-on to Asurion’s second-lien term loan due March 3, 2021. The second-lien execution hasn’t been altered.

Asurion’s $1.7 billion second-lien term loan is priced at L+750, with a 1% LIBOR floor. The new second-lien money is offered at 99-99.5, and the issuer will reset the hard call protection to 103 and 101.5 in years one and two, respectively. The second-lien add-on would yield roughly 8.9-9.02% to maturity.

The first-lien term loan will amortize at 2.5% annually when net leverage is greater than 5.5x, and at 1% otherwise. The loan will include six months of 101 soft call protection. At current talk and with the amortization, the loan would yield about 5.19% to maturity.

Proceeds, along with cash on hand, will be used to refinance the $250 million non-amortizing term loan and for other general corporate purposes, including funding a minority equity buyout as part of the company’s anticipated equity recapitalization, in addition to now refinancing the TLB-1, according to sources.

The issuer also will be amending its credit facility, sources noted.

Commitments and consents are due by noon EDT tomorrow.

Asurion in February 2014 completed a dividend recapitalization deal that included the $1.7 billion second-lien loan, and a $300 million fungible add-on to its B-1 term loan due May 2019 (taking that tranche to roughly $4.2 billion and boosting pricing to L+375, with a 1.25% floor), as well as the $250 million B-3 loan that will be refinanced via the current transaction. Asurion also amended its roughly $850 million B-2 term loan due July 2020, raising pricing to L+350, with a 0.75% floor.

Asurion, which provides protection services for the wireless industry, is controlled by Madison Dearborn, Berkshire Partners, Providence Equity Partners, and Welsh, Carson, Anderson & Stowe. – Chris Donnelly

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