Generac ups term loan B to $900 million, flexes to Libor plus 500 bps

By Sara Rosenberg

New York, May 21 - Generac Power Systems Inc. increased its six-year senior secured term loan B to $900 million from $800 million and lifted pricing to Libor plus 500 basis points from Libor plus 450 bps, according to sources.

In addition, the original issue discount on the B loan was widened to 98 from 98½ and call protection was revised to 102 in year one and 101 in year two, from just 101 soft call protection for one year, sources said.

The 1.25% Libor floor was left unchanged.

With the term loan B upsizing, the company withdrew plans for a $425 million unsecured notes offering as a result of recent financing market conditions.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch and Goldman Sachs & Co. are the lead banks on the deal.

Proceeds will be used to refinance about $574 million of existing term loan debt and to pay a special cash dividend of up to $6 per share on the company's outstanding common stock that is expected to be declared by or shortly after the end of this quarter.

The stock dividend was reduced from a previous amount of up to $10 per share due to the decrease in the total debt financing package.

As before, the company also expects to refinance an existing $150 million undrawn revolver with a similarly sized asset-backed revolver.

Generac is a Waukesha, Wis.-based designer and manufacturer of generators and other engine powered products.

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