AM General cuts term loan size to $325 million, flexes pricing higher

By Sara Rosenberg

New York, March 7 - AM General LLC downsized its five-year term loan B to $325 million from $350 million and raised pricing to Libor plus 875 basis points from talk of Libor plus 650 bps to 675 bps, according to a market source.

Also, the Libor floor was increased to 1.5% from 1.25% and the original issue discount was widened to 97 from 98, the source said.

Furthermore, the loan is now non-callable for two years, then at 103 in year four, versus the previously proposed hard call protection of 102 in year one and 101 in year two.

Additionally, amortization was beefed up to 10% per annum from 5%, the excess cash flow sweep was changed to 50% from 75%, the accordion was eliminated and the total leverage ratio levels were revised, the source continued.

The company's now $345 million senior secured credit facility (B2/BB-), down from $370 million, also includes a $20 million revolver.

Recommitments are due at 3 p.m. ET on Friday.

Citigroup Global Markets Inc., BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Jefferies Finance LLC and Natixis are leading the deal.

Proceeds will be used to refinance existing bank debt.

AM General is a South Bend, Ind.-based designer, manufacturer and supplier of specialized vehicles for commercial and military customers.

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