LMI Aerospace cuts spread on $225 million term B to Libor plus 350 bps

By Sara Rosenberg

New York, Jan. 31 - LMI Aerospace Inc. reduced pricing on its $225 million six-year term loan B to Libor plus 350 basis points from talk of Libor plus 400 bps to 425 bps, according to a market source.

Also, a step-down was added to the term B to Libor plus 325 bps when total leverage falls below 3 times, the source said.

And, the original issue discount on the term loan B was tightened to 99½ from 99.

The 1.25% Libor floor and 101 soft call protection for one year on the B loan were left unchanged.

Amortization on the term loan is 1% per annum.

Financial covenants are a maximum net leverage ratio that opens at 5 times and steps down over time 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.

In addition to the term loan B, the company is getting a revolver that was upsized to $125 million from $100 million, the source continued.

The revolver has a 50 bps unused fee that can step down to 37.5 bps based on leverage.

Recommitments were due at 5 p.m. ET on Thursday and allocations are expected to go out on Friday.

RBC Capital Markets and Wells Fargo Securities LLC are the lead banks on the now $350 million senior secured credit facility (B1/B+), up from $325 million.

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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