AlixPartners splits term loan B into $75 million B-1, $525 million B-2

By Sara Rosenberg

New York, May 29 - AlixPartners LLP divided its $600 million seven-year first-lien term loan B (Ba3/B+) into a $75 million five-year B-1 tranche and a $525 million seven-year B-2 tranche, according to market sources.

Price talk on the B-1 loan is Libor plus 425 basis points with a 1.25% Libor floor and an original issue discount of 99, while price talk on the B-2 loan is Libor plus 525 bps with a 1.25% floor and an original issue discount of 981/2, sources said.

Most recently, when the first-lien loan was one tranche, price talk was Libor plus 475 bps to 500 bps. At launch it had been talked at Libor plus 425 bps. The loan had a 1.25% floor and a discount of 99.

As before, all of the first-lien term loan debt has 101 soft call protection for one year.

Amortization on the B-1 is $5 million in year one, $15 million in years two, three and four and $25 million in year five, sources said. Amortization on the B-2 is 1% per year, with the balance due at maturity.

Another change to the first-lien term loan debt includes setting the accordion at $150 million, subject to 4 times net first-lien leverage. Most recently, it was $75 million plus $150 million subject to 4 times net first-lien leverage. Prior to that, it was $100 million plus $200 million subject to the net leverage requirement.

The facility still has a 75% excess cash flow sweep with step-downs. This feature was revised earlier from 50%.

The company's $895 million deal also provides for a $75 million five-year revolver (Ba3/B+) and a $220 million 71/2-year second-lien term loan (B3/B-).

Pricing on the second-lien term loan is expected to be about 400 bps higher than the term loan B-2 pricing, sources said. When the first round of changes to the credit facility was announced last week, it was reported that the second-lien term loan would be 400 bps higher than the level at which first-lien pricing falls out. At launch, guidance on this tranche had been Libor plus 800 bps.

The second-lien term loan has a 1.25% Libor floor and an original issue discount that is still to be determined. The discount had initially been launched at 98.

Call protection on the second-lien loan is 103 in year one, 102 in year two and 101 in year three.

Commitments are due at 3 p.m. ET on Wednesday.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Goldman Sachs & Co., Jefferies & Co. and UBS Securities LLC are the lead banks on the deal.

Proceeds will be used to help fund the CVC Capital Partners buyout of the company from Hellman & Friedman.

Closing is expected this summer, subject to customary conditions.

AlixPartners is a performance improvement, corporate turnaround and financial advisory services firm.

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