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CSK gets commitment for $450 million term loan
By Sara Rosenberg
New York, June 19 - CSK Auto Inc. has received a commitment for a $450 million senior secured term loan, according to an 8-K filed with the Securities and Exchange Commission Monday.
JPMorgan and Lehman are joint lead arrangers on the deal, JPMorgan, Lehman and Wachovia are joint bookrunners, JPMorgan is administrative agent, and Lehman and Wachovia are co-syndication agents.
The term loan is delayed-draw for six months, with the company able to make the draws on three separate occasions.
Pricing on the term loan will be based on ratings. If the deal is rated Ba3/BB, pricing is Libor plus 275 basis points. If it's rated Ba3/B+, pricing is Libor plus 300 bps. If it's rated B1/B+, pricing is Libor plus 325 bps. If it's rated B2/B, pricing is Libor plus 350 bps. If it's rated B3/B-, pricing is Libor plus 400 bps. And, if it's rated lower than B3/B-, pricing is Libor plus 500 bps.
The delayed-draw fee is 150 bps for the first four months, and 300 bps thereafter.
Financial covenants will include a maximum leverage ratio of 4.00:1.00 for 2006, 3.75:1.00 for 2007, 3.50:1.00 for 2008, 3.25:1.00 for 2009 and 3:00:1.00 for 2010 and thereafter.
There is also a minimum fixed-charge coverage ratio of 1.35:1.00 for 2006, 1.40:1.00 for 2007 and 2008, and 1.45:1.00 for 2009 and thereafter.
Proceeds will be used to fund the cash tender offers for the company's $225 million of 7% senior subordinated notes due 2014, $125 million of 3 3/8% senior exchangeable notes due 2025 and $100 million of 4 5/8% senior exchangeable notes due 2025.
The tender offer will expire on July 18.
CSK also announced on Monday that it entered into an extension of the previous temporary waiver with the lenders under its credit facility regarding the deadline to deliver financial statements for fiscal year 2005 and fiscal quarters 2006.
CSK is a Phoenix, Ariz., specialty retailer in the automotive aftermarket.
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