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CNO Financial upsizes term loan B-2 to $425 million, reduces spreads
By Sara Rosenberg
New York, Sept. 20 - CNO Financial Group Inc. increased the size of its six-year term loan B-2 to $425 million from $400 million and lowered pricing to Libor plus 375 basis points from talk of Libor plus 400 bps to 425 bps, according to market sources.
The B-2 loan still has a 1.25% Libor floor and an original issue discount of 99.
In addition, the company trimmed pricing on its $250 million four-year term loan B-1 to Libor plus 325 bps from Libor plus 350 bps, sources said.
The original issue discount on the B-1 loan firmed at 991/2, the tight end of the 99 to 99½ guidance, while the 1% Libor floor was left intact, sources continued.
Both term loans still have 101 soft call protection for one year.
Amortization on the term loan B-1 is 20% in years one and two and 30% in years three and four. The term loan B-2 amortizes at a rate of 1% per year.
The company's now $725 million credit facility (Ba3/B+), up from $700 million, also includes a $50 million three-year unfunded revolver.
Recommitments were due on Thursday morning.
Goldman Sachs & Co. and J.P. Morgan Securities LLC are the lead banks on the deal.
Proceeds will be used to help repay all $224 million outstanding under the company's existing senior secured credit facility, to repurchase up to $275 million of 9% senior secured notes due 2018 for about $323 million and to repurchase about $200 million of 7% convertible senior debentures due 2016 from Paulson & Co. for around $334 million.
Other funds for the transaction will come from $275 million of new senior secured notes due 2020, which were upsized from $250 million, sources added.
The additional funds raised through the term loan B-2 and bond upsizings will be used to add cash to the balance sheet.
Closing on the refinancing is expected in late September.
CNO is a Carmel, Ind.-based insurance company.
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