Gardner Denver tightens $400 million term loan OID to 98.5

By Sara Rosenberg

New York, June 24 – Gardner Denver Inc. (Ingersoll-Rand) revised the original issue discount on its $400 million senior secured covenant-lite term loan B (Ba2/BB+) due February 2027 to 98.5 from 98, according to a market source.

Pricing on the term loan remained at Libor plus 275 basis points with a 0% Libor floor.

The term loan has 101 soft call protection for six months.

Amortization is 1% per annum.

Mandatory prepayments are 50% of excess cash flow sweep with step-downs to 25% and 0% at consolidated net first-lien leverage of 2.25x and 2x, respectively, 100% of asset sales with step-downs to 50% and 0% at consolidated net first-lien leverage of 2.25x and 2x, respectively, and 100% of non-permitted debt issuance proceeds subject to basket carve outs.

The term loan has an accordion of the sum of the greater of $1.6 billion and 100% of LTM consolidated EBITDA, plus voluntary prepayment amounts, plus an unlimited pari passu secured amount subject to first-lien net leverage of no greater than 4.5x or first-lien net leverage getting no worse, plus an unlimited junior secured amount subject to total net leverage of no greater than 5x or total net leverage getting no worse.

Guarantors are Ingersoll-Rand Inc. (formerly known as Gardner Denver Holdings Inc.) and each of Ingersoll-Rand Inc.’s existing and subsequently acquired or organized, direct and indirect, wholly owned, U.S., material restricted subsidiaries, subject to customary and appropriate exceptions.

Security is a perfected first priority lien on substantially all tangible and intangible assets and capital stock of Gardner Denver Inc. and the subsidiary guarantors, limited to 66% of the capital stock of first tier foreign subsidiaries and subject to other customary and appropriate exceptions.

Citigroup Global Markets Inc., KKR Capital Markets, Goldman Sachs Bank USA, PNC and Credit Agricole are the joint lead arrangers on the deal. Citigroup is the administrative agent on the deal.

Recommitments were scheduled to be due at noon ET on Wednesday, the source added.

Proceeds will be used to for general corporate purposes.

Closing is expected on Monday.

Gardner Denver is a provider of mission-critical flow control and compression equipment and associated aftermarket parts, consumables and services.

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