American Beacon shifts funds between first- and second-lien term loans

By Sara Rosenberg

New York, March 4 – American Beacon Advisors Inc. upsized its first-lien term loan to $230 million from $220 million and downsized its second-lien term loan to $80 million from $90 million, according to a market source.

Also, pricing on the first-lien term loan was reduced to Libor plus 450 basis points from Libor plus 475 bps and the original issue discount was changed to 99˝ from 99, the source said.

The first-lien term loan still has a 1% Libor floor and 101 soft call protection for one year.

Pricing on the second-lien term loan was unchanged at Libor plus 875 bps with a 1% Libor floor and a discount of 98, and the debt continues to have call protection of 102 in year one and 101 in year two.

Included in the term loans is a total leverage covenant.

The company’s $350 million credit facility also provides for a $40 million revolver.

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

RBC Capital Markets LLC and Barclays are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by Kelso & Co. and Estancia Capital Management from TPG Capital and Pharos Capital Group LLC.

Closing is expected in the second quarter, subject to customary conditions, including approvals of the board of trustees and shareholders of the American Beacon family of mutual funds and consents from other American Beacon clients.

Total leverage is 5.5 times and equity is 50% of the capitalization.

American Beacon Advisors is a Fort Worth-based provider of investment advisory services to institutional and retail markets.

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