Harland Clarke sets spread on $750 million term B-3 at Libor plus 550 bps

By Sara Rosenberg

New York, April 24 - Harland Clarke Holdings Corp. firmed pricing on its $750 million first-lien covenant-light incremental term loan B-3 (B1/B+) due May 2018 at Libor plus 550 basis points, the wide end of the Libor plus 525 bps to 550 bps, according to a market source.

In addition, the Libor floor was increased to 1.5% from 1.25% and the call protection was changed to 102 in year one and 101 in year two, from just 101 for one year, the source said.

The loan still has an original issue discount of 99.

Other changes include raising amortization to 2.5% from 1% and setting minimum amortization to the term loan at the lesser of 5% total first-lien debt and $75 million, the source continued.

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

Credit Suisse Securities (USA) LLC, BofA Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., Jefferies Finance LLC and J.P. Morgan Securities LLC are the lead banks on the deal.

Proceeds will be used to refinance an existing non-extended term loan due 2014 that is priced at Libor plus 250 bps.

Pro forma leverage is 4 times last-12-months March 31 adjusted EBITDA of $510 million.

Harland Clarke is a San Antonio-based provider of payment solutions, marketing services and security solutions.

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