Hostess Eyes $994M Leveraged Loan to Reduce Borrowing Costs

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Hostess Brands is returning to market with a refinancing transaction that will extend maturity and lower pricing on its $994 million covenant-lite first-lien term loan, according to sources. Credit Suisse will hold a lender call today at 2:30 p.m. EST, and commitments will be due by 5 p.m. EST on Wednesday, Nov. 15.

With this transaction the issuer will extend maturity on the loan by one year, to August 2023. Pricing will be reduced to L+225, from the current L+250, and will include a 25 bps ratings-based step-down. The LIBOR floor is unchanged at 0.75%. The loan is offered at an OID of 99.875 and the 101 soft call will be reset for six months.

At that talk, the loan would yield about 3.71% to maturity.

Current facility ratings are BB–/B1, with a 2 recovery rating from S&P Global Ratings. Corporate ratings are B+/B1.

Hostess Brands (Nasdaq: TWNK) operates several bakeries in the U.S., producing snack cakes under the Hostess and Dolly Madison brand names. — Jon Hemingway

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