Alstom Auxiliary reveals talk on first- and second-lien term loans

By Sara Rosenberg

New York, May 28 - Alstom Auxiliary Components disclosed price talk on its €310 million equivalent dollar and euro seven-year covenant-light first-lien term loan B and €120 million dollar-equivalent eight-year covenant-light second-lien term loan at its bank meeting on Wednesday, according to a market source.

The first-lien term loan is talked at Libor plus 375 basis points to 400 bps with a 1% Libor floor and an original issue discount of 99, and the second-lien term loan is talked at Libor plus 725 bps with a 1% Libor floor and a discount of 99, the source said.

Included in the first-lien term loan is 101 soft call protection for six months and amortization of 1% per annum, and the second-lien loan has call protection of 102 in year one and 101 in year two.

The company's €630 million senior secured credit facility also provides for a €40 million five-year multicurrency revolver and a €160 million five-year multicurrency letter-of-credit facility.

The revolver and letter-of-credit facility have a springing first-lien net leverage covenant.

Mandatory prepayments are from 50% excess cash flow sweep with first-lien senior secured leveraged-based step-downs subject to carve outs, 100% of debt issuances subject to carve outs and reinvestment rights, and 100% of asset sales, the source continued.

Following repayment in full of the first-lien term loans, the second-lien loan will be prepaid on the same terms as applied to the first-lien term loans, subject in certain cases to call protection.

Commitments are due at 5 p.m. ET on June 6, the source added.

Citigroup Global Markets Inc., Barclays, ING Financial Markets LLC, RBC Capital Markets and Societe Generale are the joint lead arrangers on the deal.

Proceeds will be used to help fund the buyout of the company by Triton from Alstom for around €730 million.

The transaction is expected to close before the end of the first half of fiscal year 2014/2015.

Alstom Auxiliary Components is a Mannheim, Germany-based company active in air preheaters and gas-gas heaters for thermal power plants, heat transfer solutions for a variety of petrochemical and industrial processes, and grinding mills for diversified industrial applications.

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