Power Solutions ups U.S. term loan to $4.2 billion, updates pricing

By Sara Rosenberg

New York, March 14 – Power Solutions (Panther BF Aggregator 2 LP) upsized its U.S. seven-year term loan B to $4.2 billion from $3.2 billion and set pricing at Libor plus 350 basis points, the low end of revised talk of Libor plus 350 bps to 375 bps and down from initial talk in the range of Libor plus 400 bps to 425 bps, according to a market source.

In addition, the company reduced pricing on its $2.25 billion equivalent euro seven-year term loan B to Euribor plus 375 bps from revised talk of Euribor plus 400 bps and initial talk in the range of Euribor plus 400 bps to 425 bps talk, the source said.

The U.S. term loan is being sold at an original issue discount of 99 and the euro term loan is being sold at a discount of 99.5.

Both term loans have a 0% floor and 101 soft call protection for one year.

Previously in syndication, the discount on the U.S. term loan was changed from 98.5, the discount on the euro term loan was tightened from 99, and the call protection on both tranches was extended from six months.

J.P. Morgan Securities LLC is the left lead on the U.S. term loan B, and Barclays is the left lead on the euro term loan B. Filings with the Securities and Exchange Commission listed Credit Suisse, Bank of America Merrill Lynch, BMO Capital Markets, CIBC Capital Markets, Citigroup, Deutsche Bank, Goldman Sachs, HSBC, RBC Capital Markets, Bank of Nova Scotia and TD Securities as leads on the debt as well. JPMorgan is the administrative agent.

Recommitments for the U.S. term loan were scheduled to be due at 4 p.m. ET on Thursday and recommitments for the euro term loan are due at 10 a.m. GMT on Friday, the source added.

Proceeds from the now $6.45 billion equivalent of term loans (Ba3/B+/BB) will be used to help fund the acquisition of Johnson Controls’ power solutions business by Brookfield Business Partners LP and Caisse de depot et placement du Quebec for around $13.2 billion.

Other funds for the transaction will come from $1 billion of senior secured notes, which were downsized from $2 billion with the U.S. term loan upsizing, €660 million of senior secured notes, $1.95 billion of senior notes, and equity.

Closing is expected by June 30, subject to customary conditions, including regulatory approvals.

In fiscal 2018, the power solutions business generated $8 billion in revenue and $1.68 billion in EBITDA.

Power Solutions is a supplier of low voltage automotive batteries.

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