Jason shifts funds between first- and second-lien term loans

By Sara Rosenberg

New York, May 16 - Jason Inc. upsized its seven-year covenant-light first-lien loan (B1/B) to $310 million from $300 million and downsized its eight-year covenant-light second-lien loan (Caa1/CCC+) to $110 million from $120 million, according to a market source.

Also, the original issue discount on the second-lien term loan was revised to 97 from 99, the source said.

Pricing on the first-lien term loan is still Libor plus 450 basis points with a 1% Libor floor and an original issue discount of 99, and pricing on the second-lien term loan is still Libor plus 800 bps with a 1% Libor floor.

The first-lien term loan continues to have 101 soft call protection for one year, and the second-lien term loan continues to have call protection of 103 in year one, 102 in year two and 101 in year three.

Earlier in syndication, the first-lien term loan pricing was increased from Libor plus 375 bps, the discount was set at the wide end of the 99 to 99½ talk and the call protection was extended from six months, and the second-lien term loan pricing was lifted from Libor plus 725 bps while the call protection was sweetened from 102 in year one and 101 in year two.

The company's $460 million credit facility also provides for a $40 million revolver (B1/B).

The credit agreement now has an incremental allowance of $80 million plus an unlimited amount subject to 3.75 times first-lien net leverage for first-lien incurrence and 4.5 times net secured leverage for second-lien incurrence, revised from 5.25 times, the source continued.

There is 50 bps MFN for the life of the deal.

The first-lien excess cash flow sweep is 75% with step-downs to 50% at 3.5 times, 25% at 3 times and 0% at 2.5 times net first-lien leverage, and the second-lien excess cash flow sweep is 75% with step-downs to 50% at 5 times, 25% at 4.5 times and 0% at 4 times total net leverage.

Recommitments were due at 1 p.m. ET on Friday, the source added.

Deutsche Bank Securities Inc., Citigroup Global Markets Inc. and HSBC Securities (USA) Inc. are the bookrunners on the deal.

Proceeds will be used to help fund the buyout of the company by Quinpario Acquisition Corp. from Saw Mill Capital LLC, Falcon Investment Advisors LLC and other investors for $538.65 million, a 6.75 multiple of the company's pro forma 2013 EBITDA.

Other funds for the transaction will come from rollover equity invested by the current owners and management of Jason and proceeds from Quinpario's initial public offering that was completed in August.

Closing is expected this quarter, subject to regulatory and shareholder approval and customary conditions.

Jason is a Milwaukee-based manufacturer of items within the seating, finishing, components and automotive acoustics markets. Quinpario is a St. Louis-based special purpose acquisition company.

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