Parsons enters $350 million three-year delayed-draw term loan

By Marisa Wong

Los Angeles, Sept. 19 – Parsons Corp. entered into a $350 million unsecured delayed-draw term loan with an increase option of up to $150 million, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA is administrative agent.

The term loan may be borrowed in a single draw during the period from and including the Sept. 14 closing date to the earlier of the date of termination of the term loan by the company and six months following the closing date.

The term loan has a three-year maturity and does not require any amortization payments.

Depending on the company’s consolidated leverage ratio (or debt rating once the company has such rating), borrowings will bear interest at adjusted term SOFR plus a margin between 87.5 basis points and 150 bps. The company will pay a ticking fee of 17.5 bps on unused term loan commitments beginning with the date that is 90 days after the closing date.

Some negative and financial covenants will be adjusted in favor of the company once the company’s existing senior notes are either amended to conform to the corresponding terms and provisions of delayed-draw term loan or repaid in full and terminated.

Proceeds may be used to pay off in full or in part the company’s existing senior notes; to prepay revolving loans outstanding under an existing revolving credit agreement; or for working capital, capital expenditures and other corporate purposes.

No amounts were funded on the closing date.

Parsons Environment & Infrastructure Group Inc., Parsons International Ltd., PTSI Managed Services Inc., Parsons Transportation Group Inc., Parsons Secure Solutions, Inc. and Parsons Government Services Inc. are subsidiary guarantors.

In connection with the new term loan, the company amended its revolving credit agreement dated June 21, 2021 with BofA as administrative agent to, among other things, permit the delayed-draw term loan and make other conforming changes, for example, updating the interest rates from adjusted Libor to adjusted term SOFR.

Parsons is a technology-focused defense, intelligence, security and infrastructure engineering firm based in Centreville, Va.

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