Engility releases price talk on $800 million of term loans with launch

By Sara Rosenberg

New York, July 26 – Engility Corp. came out with price talk on its $800 million of senior secured term loans in connection with its bank meeting on Tuesday, according to a market source.

The $200 million four-year term loan B-1 is talked at Libor plus 450 basis points to 475 bps with no floor and an original issue discount of 99.5, and the $600 million seven-year term loan B-2 is talked at Libor plus 475 bps to 500 bps with a 1% Libor floor and a discount of 99, the source said.

Both term loans have 101 soft call protection for six months.

Amortization on the term loan B-1 is 10% per annum and on the term loan B-2 is 1% per annum, the source continued.

Financial covenants include a first-lien net leverage ratio of 5.5x with step-downs.

Morgan Stanley Senior Funding Inc., Barclays, SunTrust Robinson Humphrey Inc., Regions Bank, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and KKR Capital Markets are the joint lead arrangers and bookrunners on the deal.

Commitments are due on Aug. 9, the source added.

Proceeds will be used to refinance existing debt.

Engility is a Chantilly, Va.-based provider of integrated services for the U.S. government.

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