Harbor Freight trims term loan to $650 million as dividend is reduced

By Sara Rosenberg

New York, Dec. 20 - Harbor Freight Tools trimmed its term loan to $650 million from $750 million, and as a result, the distribution to shareholders that the debt is funding was reduced, according to a market source.

Pricing on the term loan was left unchanged at Libor plus 500 basis points with a 1.5% Libor floor and an original issue discount of 99. There is still soft call protection of 102 in year one and 101 in year two.

The company's now $675 million credit facility continues to provide for a $25 million revolver that is also priced at Libor plus 500 bps with a 1.5% Libor floor.

Allocations are expected to go out on Wednesday, the source added.

Barclays is the lead bank on the deal.

In addition to funding the dividend, proceeds from the credit facility will be used to refinance an existing term loan.

Ratings on the deal as originally structured were Ba3 from Moody's Investors Service and B+ from Standard & Poor's.

Harbor Freight Tools is a Camarillo, Calif.-based tool and equipment catalog retailer.

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