DS Waters carves out second-lien loan, revises first-lien pricing

By Sara Rosenberg

New York, Feb. 9 - DS Waters of America Inc. restructured its $535 million credit facility, downsizing the funded and delayed-draw first-lien term loans and adding second-lien term loan funded and delayed-draw tranches, according to a market source.

The facility now consists of a $285 million 51/2-year funded first-lien term loan, down from $390 million, a $55 million 51/2-year delayed-draw first-lien term loan, down from $75 million, a new $105 million six-year funded second-lien term loan and a new $20 million six-year delayed-draw second-lien term loan, the source said.

As before, the facility also provides for a $70 million five-year ABL revolver.

In addition, pricing on the first-lien term loans was increased to Libor plus 900 basis points from talk of Libor plus 675 bps to 700 bps, the source remarked. The 1.5% Libor floor and original issue discount of 98 were left intact.

Call protection on the first-lien term loans was sweetened as well, going to 103 in year one, 102 in year two and 101 in year three from just 101 in year one.

Also, the first-lien term loan now has a 75% excess cash flow sweep, up from 50%, and amortization of 1% in year one, 2.5% in year two and 5% in years three, four and five, versus just 1% per year previously, the source added.

Meanwhile, price talk on the second-lien term loans is Libor plus 950 bps cash pay plus 400 bps PIK, with a 1.5% Libor floor and an original issue discount of 98.

The second-lien debt is non-callable for one year, then at 104 in year two, 103 in year three, 102 in year four and 101 in year five.

Recommitments are due on Wednesday.

Credit Suisse Securities (USA) LLC, GE Capital Markets and Jefferies & Co. are the lead banks on the deal, with Credit Suisse the left on the term loan and GE the left on the revolver.

Proceeds will be used to refinance existing debt, and the delayed-draw term loans are available for acquisition funding.

Leverage is 2.3 times through the first-lien and 3.2 times through the second-lien.

DS Waters is an Atlanta-based bottled water, water filtration and coffee service company.

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