Husky lifts term B to $1.75 billion, cuts spread to SOFR plus 500 bps

By Sara Rosenberg

New York, Jan. 31 – Husky Injection Molding Systems Ltd. upsized its five-year covenant-lite term loan B (B3/B-) to $1.75 billion from an original size of $1.3 billion and reduced pricing to SOFR plus 500 basis points from SOFR plus 525 bps, according to a market source.

Also, the original issue discount on the term loan was changed to 98.5 from 98, and a ticking fee was added of half the spread for days 46 to 90, and the transaction must close within 90 days, the source said.

In addition, the J. Crew provision was expanded to also prohibit transfers in the form of exclusive licenses to unrestricted subsidiaries, and J. Crew language was expanded to qualify the entire credit agreement, in addition to Section 10.02.

Covenants were adjusted upward 0.25x for an increase in closing leverage except for unlimited restricted payments, which will remain unchanged.

Furthermore, the credit agreement was revised to prohibit any restricted subsidiary from being designated as unrestricted if it owns or exclusively licenses any material IP.

And, portability was changed to be subject to minimum 47.5% pro forma third-party equity, from 50%, and total net leverage to be no worse than 6.25x, from 6x. Portability is still subject to a new controlling holder being either at least $1 billion AUM or a strategic or other corporate business in reasonably related line of business, and no worse corporate ratings of B3/B- with stable outlooks.

As before, the term loan has a 0% floor and 101 soft call protection for six months.

Deutsche Bank Securities Inc., BofA Securities Inc. and others to be announced are the bookrunners on deal. Deutsche is the administrative agent.

Recommitments were scheduled to be due at 4:30 p.m. ET on Wednesday, the source added.

Allocations are expected on Thursday morning, the source added.

Proceeds from the loan, $1 billion of secured notes and new preferred equity will be used to refinance the company’s existing capital structure, including senior notes due 2026, senior PIK notes due 2025 and credit facilities borrowings, and to pay respective fees and expenses.

The notes were downsized from $1.3 billion and the equity contribution was downsized by $150 million with the term loan upsizing.

Husky is a Bolton, Ont.-based provider of engineered tooling, services and systems primarily to the food and beverage packaging and medical end markets.

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