Generac ups term B to $1.2 billion, cuts spread to Libor plus 275 bps

By Sara Rosenberg

New York, May 10 - Generac Power Systems Inc. upsized its seven-year senior secured term loan B (B2/B+) to $1.2 billion from $1.15 billion and trimmed pricing to Libor plus 275 basis points from Libor plus 300 bps, according to a market source.

Also, a step-down was added to Libor plus 250 bps when net leverage is less than 3 times and post delivery of fiscal year-end Dec. 31, 2013 financials.

In addition, the Libor floor on the term loan was tightened to 0.75% from 1%, the original issue discount was revised to 99¾ from 991/2, and the 101 soft call protection was extended to one year from six months, the source said.

Furthermore, the 24-month sunset on the incremental facility was removed, the source added.

Recommitments were due by 11 a.m. ET on Friday.

J.P. Morgan Securities LLC is the lead bank on the deal.

Proceeds will be used to refinance an existing term loan and pay a special dividend to common shareholders of up to $5 per share, and the funds raised through the upsizing will add cash to the balance sheet.

In addition to the term loan, the company plans on getting a $150 million asset-based revolver, which is expected to be undrawn at close.

Generac is a Waukesha, Wis.-based designer and manufacturer of generators.

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