Alliance Data Systems to launch $200 million term loan A-2 on Friday

By Sara Rosenberg

New York, July 8 - Alliance Data Systems Corp. is scheduled to launch a $200 million unsecured term loan A-2 on Friday, according to a market source.

BMO Capital Markets and SunTrust Robinson Humphrey are the lead banks on the deal.

The term loan A-2 matures in March 2012, which matches the maturity of the company's existing bank debt.

Opening pricing is Libor plus 250 basis points, based on senior leverage of below 1.75 times. Pricing can step up to Libor plus 300 bps at leverage of 1.75 to 2.25 times and to Libor plus 350 bps at leverage of 2.25 times or above.

There is a $100 million accordion feature.

Financial covenants include a maximum total leverage ratio of 3.75 times, a maximum senior leverage ratio of 2.75 times, a minimum interest coverage ratio of 3.5 times and a delinquency ratio of 4.5%.

Proceeds will be used to refinance existing debt.

Alliance Data is a Dallas-based provider of loyalty and marketing services.

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