Cubic launches $1.78 billion of term loans at Libor plus 400-425 bps

By Sara Rosenberg

New York, April 16 – Cubic Corp. launched on Friday its $1.475 billion seven-year first-lien term loan B (B3/B) and $300 million seven-year first-lien term loan C (Ba3/B+) with price talk of Libor plus 400 basis points to 425 bps with a 0.75% Libor floor and an original issue discount of 99, according to a market source.

Included in the term loan debt is 101 soft call protection for six months.

The term loan B and term loan C will trade as a strip, the source said.

The difference between the two loans is the collateral pool. The term loan C is backed by cash collateralized on the balance sheet.

Barclays, Credit Suisse Securities (USA) LLC, BMO Capital Markets, KKR Capital Markets, Mizuho, RBC Capital Markets and Truist Securities Inc. are the bookrunners on the senior secured deal.

Commitments are due at 5 p.m. ET on April 28, the source added.

Proceeds will be used to help fund the buyout of the company by Veritas Capital and Evergreen Coast Capital Corp. for $70.00 per share in cash. The all-cash transaction is valued at $2.8 billion, including the assumption of debt.

Closing is expected in the second quarter, subject to customary conditions, including the receipt of shareholder and regulatory approvals.

Cubic is a San Diego-based provider of integrated solutions that increase situational understanding for transportation, defense C4ISR and training customers.

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