American Axle flexes $1.55 billion term loan B to Libor plus 225 bps

By Sara Rosenberg

New York, March 8 – American Axle & Manufacturing Holdings Inc. trimmed pricing on its $1.55 billion seven-year term loan B to Libor plus 225 basis points from talk of Libor plus 250 bps to 275 bps, according to a market source.

Also, the original issue discount on the term loan B was changed to 99.75 from 99.5, and the 101 soft call protection was extended to one year from six months, the source said.

The term loan B still has a 0.75% Libor floor.

The company’s $2.45 billion senior secured credit facility (Ba2/BB/BB+) also includes an $800 million five-year revolver and a $100 million five-year term loan A.

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

Proceeds will be used to help fund the acquisition of Metaldyne Performance Group Inc. for about $1.6 billion in cash and stock, plus the assumption of $1.7 billion in net debt. Each share of Metaldyne’s common stock will be converted into the right to receive $13.50 per share in cash and 0.5 of a share of American Axle common stock.

Other funds for the transaction will come from $1.2 billion of senior notes.

Pro forma 2016 estimated net debt to adjusted EBITDA will be about 3.5 times.

American Axle expects the combined company to generate significant operating profitability and cash flow that will facilitate rapid debt reduction and is targeting a net debt to adjusted EBITDA ratio of 2 times by the end of 2019.

Closing is expected in the first half of this year, subject to shareholder and regulatory approval and other customary conditions.

American Axle is a Detroit-based manufacturer and designer of driveline and drivetrain systems and related components and modules, chassis systems, electric drive systems and metal-formed products. Metaldyne is a Plymouth, Mich.-based provider of highly engineered lightweight components for use in powertrain and suspension applications for the vehicle markets.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.