Allegion's upsized $500 million term loan prices at 99.75, breaks to par bid, par ½ offered

By Paul A. Harris

Portland, Ore., Sept. 27 - Allegion U.S. Holding Co. priced its upsized $500 million Libor plus 225 basis points seven-year term loan B at 99.75, and the deal traded to par bid, par ½ offered, a market source said on Friday.

The loan was upsized to $500 million from $300 million with the downsizing of the company's senior unsecured notes offering.

Pricing on the term loan B was reduced to Libor plus 225 bps from Libor plus 275 bps, and a step-down was added to Libor plus 200 bps when gross total leverage is less than 2.5 times, the source said.

The term loan B still has a 0.75% Libor floor, an original issue discount of 99¾ and 101 soft call protection for six months.

Included in the B loan is a ticking fee of half the spread from days 31 to 90 and the full spread from days 91 to 120, at which point the facility will either be funded or terminated.

Recommitments are due at 5 p.m. ET on Tuesday, the source added.

The company's now $1.5 billion credit facility (Ba1/BBB), up from $1.3 billion, also provides for a $500 million five-year revolver and a $500 million five-year term loan A, both talked at Libor plus 200 bps.

J.P. Morgan Securities LLC, Goldman Sachs Bank USA, Bank of America Merrill Lynch, BNP Paribas Securities Corp. and Citigroup Global Markets Inc. are the lead banks on the deal.

Proceeds will be used to pay a dividend to Ingersoll Rand in connection with Allegion's spin-off from Ingersoll.

Allegion is a Dublin-based provider of security products and solutions.

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