Alstom flexes €120 million second-lien term loan to Libor plus 850 bps

By Sara Rosenberg

New York, June 17 – Alstom Auxiliary Components increased pricing on its €120 million dollar-equivalent eight-year covenant-light second-lien term loan (Caa2/CCC+) to Libor plus 850 basis points from Libor plus 725 bps, according to a market source.

In addition, the original issue discount on the second-lien term loan was modified to 96 from 99 and the incremental allowance was reduced to $55 million from $75 million, the source said.

The second-lien term loan still has a 1% Libor floor and call protection of 102 in year one and 101 in year two.

Recommitments are due at 5 p.m. ET on Wednesday, the source added.

The company’s €630 million senior secured credit facility also provides for a €40 million five-year multicurrency revolver (B2/B), a €160 million five-year multicurrency letter-of-credit facility (B2/B) and a €310 million equivalent dollar and euro seven-year covenant-light first-lien term loan B (B2/B).

The term loan B is divided into a $200 million tranche and a €163 million tranche.

Pricing on the first-lien term loan B debt is Libor/Euribor plus 450 bps with a 1% floor and an original issue discount of 99, and there is 101 soft call protection for six months.

Earlier in syndication, pricing on the first-lien term loan B was revised from talk of Libor/Euribor plus 375 bps to 400 bps, and the excess cash flow sweep was changed to 75% from 50% with first-lien senior secured leveraged-based step-downs subject to carve outs.

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

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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