Culligan says majority consent to switch to SOFR term loan pricing

Chicago, Feb. 24 – Culligan International Co. amended a majority of its existing $2.1 billion term loan B due July 30, 2028 and existing $150 million delayed-draw term loan to transition the base rate to SOFR from Libor, according to a market source.

Non-consenting lenders will remain with Libor pricing.

The amendment resulted in $2,076,111,111.13 of the $2.1 billion term loan now based on SOFR pricing with $23,888,888.87 left with original Libor pricing.

For the delayed-draw term loan, $148,293,650.80 is now using SOFR and the remaining $1,706,349.21 is based on Libor.

Pricing on the amended term loans is SOFR plus 400 basis points with a step-downs to SOFR plus 375 bps at 4.75x leverage and SOFR plus 350 bps at 4.25x leverage, 0 bps CSA and a 0.5% floor, as previously reported.

The amended term loans were offered at par, the source said.

Closing will take place on Feb. 25 for the amended loans.

As previously reported, the company, via Osmosis Buyer Ltd., was in market with a new $1.1 billion incremental covenant-lite term loan B due July 30, 2028 and $250 million delayed-draw covenant-lite term loan.

As of Feb. 17, pricing had firmed at SOFR plus 400 bps with a step-downs to SOFR plus 375 bps at 4.75x leverage and SOFR plus 350 bps at 4.25x leverage, 0 bps CSA, a 0.5% floor and an original issue discount of 99.25.

Ticking fees on the new incremental funded term loan are half the margin from days 61 to 120 and the full margin thereafter.

Ticking fees will begin to accrue on the allocation date, a source said.

The new term loan debt has 101 soft call protection for six months.

The soft call protection will be in effect from the time of the acquisition closing and the funding date, expected late in the second quarter of 2022, for both the incremental facility and the amended loans. The non-amended Libor loans will not have the benefit of the reset soft call protection at 101.

Morgan Stanley Senior Funding Inc. is the left lead arranger on both the incremental loan and the amended loans (B3/B).

Proceeds from the new term loans will be used to fund the acquisition of Waterlogic Group Holdings, for general corporate purposes and to pay related fees and expenses.

Culligan is a Rosemont, Ill.-based provider of water treatment products and services. Waterlogic is a Maidenhead, U.K.-based designer, manufacturer, distributor and service provider of drinking water dispensers and accessories.

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