Crown Holdings discloses price talk on U.S. and euro term loans

By Sara Rosenberg

New York, Jan. 9 – Crown Holdings Inc. released price talk on its $1.25 billion seven-year covenant-light senior secured term loan B (Baa2/BB+) and €750 million seven-year covenant-light senior secured term loan B (Baa2/BB+) in connection with its London bank meeting, according to a market source.

A bank meeting for U.S. investors will take place at 10:30 a.m. ET in New York on Wednesday.

Price talk on the U.S. term loan is Libor plus 225 basis points with a 0% Libor floor and an original issue discount of 99.75, and talk on the euro term loan is Euribor plus 275 bps with a 0% floor and a discount of 99.75, the source said.

The term loans include 101 soft call protection for six months, amortization of 1% per annum and a ticking fee of half the spread from days 46 to 75 and the full spread thereafter, the source continued.

Incremental allowance is $300 million plus unlimited amounts subject to pro forma net first-lien leverage of 2 times or less, with 50 bps MFN within the first 18 months.

Mandatory prepayments are from a 50% excess cash flow sweep when secured net leverage is 2.5 times and 0% when secured net leverage is less than 2.5 times.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Bank of America Merrill Lynch, BNP Paribas Securities Corp., Mizuho, the Bank of Nova Scotia, Santander, TD Securities (USA) LLC and Wells Fargo Securities LLC are the joint lead arrangers on the deal, with Citigroup the left lead. Deutsche Bank is the administrative agent.

Commitments are due at 5 p.m. ET on Jan. 18, the source added.

Proceeds will be used to help fund the acquisition of Signode Industrial Group Holdings (Bermuda) Ltd. from the Carlyle Group in a cash transaction valued at $3.91 billion, subject to customary closing adjustments.

Other funds for the transaction are expected to come from bonds.

Pro forma net leverage will be 5.1 times as of Sept. 30, 2017, and total net leverage will be 5.3 times as of Sept. 30, 2017. Net leverage is anticipated to decrease by 0.5 times per year.

Closing is expected this quarter, subject to review by various competition authorities.

Crown Holdings is a Philadelphia-based provider of consumer packaging. Signode is a Glenview, Ill.-based provider of transit packaging systems and solutions.

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