Bank of America Merrill Lynch, Morgan Stanley, Barclays, Credit Suisse, Deutsche Bank, and Goldman this morning launched their mix of add-on and new covenant-lite first- and second-lien loans for Asurion.
Proceeds will be used to refinance the company’s holdco debt and fund a distribution to shareholders and option holders, sources said. The issuer appears to be raising more than $1.2 billion of incremental debt.
Asurion is planning a $300 million fungible add-on to its TLB-1 due May 24, 2019, talked at L+375, with a 1.25% LIBOR floor, and offered at 99-99.5, along with a new non-amortizing $250 million, three-year TLB-3 that is talked at L+300, with a 0.75% LIBOR floor, and offered at 99.5. All the new and existing first-lien loans will now include 12 months of 101 soft call protection.
The new $1.7 billion, seven-year second-lien term loan is talked at L+750-800, with a 1% LIBOR floor, offered at 98, sources said. The loan will be non-callable for one year, followed by 103 and 101 call premiums in years 2-3, respectively.
Asurion will amend alongside the new loans, increasing pricing on both its B-1 and B-2 loans and including a 50 bps amendment fee.
Pricing on the $3.9 billion covenant-lite B-1 term loan due May 2019 would increase to L+375, with a 1.25% LIBOR, from L+325, with a 1.25% LIBOR floor and a 101 soft call premium that runs through Feb. 22, 2014.
The roughly $850 million B-2 term loan due July 8, 2020, currently priced at L+275, with a 0.75% LIBOR floor would increase to L+350, with a 0.75% LIBOR floor.
New money commitments and amendment consents are due at noon EST on Wednesday, Feb. 26.
At current talk, yields would be as follows:
- The new money TLB-1 would yield 5.21-5.33% to maturity; including the fee, the amended TLB-1 would yield 5.21%;
- The amended TLB-2 would yield 4.41% to maturity;
- The new TLB-3 would yield 3.99% to maturity;
- The new second-lien term loan would yield 9.19-9.73%.
The current $1 billion unsecured term loan sits at Lonestar Intermediate Super Holdings LLC. The 7.5-year, covenant-lite loan is priced at L+950, with a 1.5% LIBOR floor. It is non-callable for two years and then callable at 102 and 101 in years three and four, respectively.
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