LMI Aerospace launches $225 million term B at Libor plus 400-425 bps

By Sara Rosenberg

New York, Jan. 16 - LMI Aerospace Inc. launched its $225 million six-year term loan B with a bank meeting on Wednesday with price talk of Libor plus 400 basis points to 425 bps with a 1.25% Libor floor and an original issue discount of 99, according to a market source.

The B loan has 101 soft call protection for one year.

Amortization on the term loan is 1% per annum.

The company's $325 million senior secured credit facility (B1/B+) also includes a $100 million five-year revolver, which has a 50 bps unused fee that can step-down to 37.5 bps based on leverage.

Financial covenants are a maximum net leverage ratio that opens at 5 times and steps down overtime to 3 times, and a minimum interest coverage ratio of 3.5 times through Sept. 30, 2015, stepping up to 4 times thereafter.

There is a $35 million accordion feature subject to a 3.75 times senior secured leverage ratio, plus an additional $40 million subject to a 3 times senior secured leverage ratio, with 50 bps MFN in each case.

Commitments are due on Jan. 30 and allocations are expected during the week of Feb. 4, the company said in an 8-K filed with the Securities and Exchange Commission.

RBC Capital Markets and Wells Fargo Securities LLC are the lead banks on the deal.

Proceeds will be used to back the company's already completed acquisition of Valent Aerostructures LLC, refinance existing debt and provide for working capital needs.

LMI Aerospace is a St. Charles, Mo.-based supplier of structural assemblies, kits and components and provider of design engineering services to the aerospace and defense industries. Valent is a Kansas City, Mo.-based provider of structural components, major sub-assemblies and machined parts for airframe manufacturers.

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