US LBM launches $1.2 billion of term loans at 98.56 to 99 OID

By Sara Rosenberg

New York, June 21 – US LBM held a lender call at 2 p.m. ET on Monday to launch an $800 million incremental term loan B-2 due Dec. 18, 2027 and a $400 million incremental delayed-draw term loan B-2 due Dec. 18, 2027 that are talked with an original issue discount of 98.56 to 99, according to a market source.

Pricing on the term loans is Libor plus 375 basis points with a 0.75% Libor floor, in line with existing term loan B-1 pricing.

The term loan B-2 and existing term loan B-1 will get 101 soft call protection for six months and MFN of 75 bps for six months, the source said.

Delayed-draw ticking fees are half the margin from says 46 to 90 and the full margin thereafter.

Availability of the delayed-draw loan is for 24 months, subject to 4.5x first-lien net leverage or first-lien net leverage immediately prior, the source continued.

The term loans will be syndicated as a strip.

The term loan B-2 is intended to be merged with the existing term loan B-1 for trading purposes once the delayed-draw term loan B-2 is fully funded.

Security is a perfected first priority security interest in term loan B collateral and a second priority interest in ABL collateral.

Barclays, Credit Suisse Securities (USA) LLC, BofA Securities Inc., Deutsche Bank Securities Inc., RBC Capital Markets, Truist and U.S. Bank are the bookrunners on the deal. Barclays is the administrative agent.

Commitments are due at noon ET on Thursday, the source added.

Proceeds will be used with $270 million of unsecured debt to fund the acquisition of American Construction Source from Angeles Equity Partners and Clearlake Capital Group, the acquisition of J.P. Hart Lumber and Hart Components, and other acquisitions under letters of intent.

US LBM is a Buffalo Grove, Ill.-based distributor of specialty building materials. American Construction is a Springfield, Mo.-based building materials distribution platform for custom home builders and repair and remodel contractors. J.P. Hart Lumber is a San Antonio-based building products distributor and manufacturer.

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