KeyPoint downsizes, lifts term loan B pricing to Libor plus 525 bps

By Sara Rosenberg

New York, March 8 – KeyPoint Government Solutions Inc. downsized its revolver to $10 million from $15 million and its term loan B to $210 million from $250 million, according to a market source.

Also, pricing on the term loan B was increased to Libor plus 525 basis points from Libor plus 425 bps, the 101 soft call protection was extended to one year from six months, and amortization was raised to 5% per annum, paid quarterly beginning first quarter 2018, from 1% per annum, the source said.

The term loan B excess cash flow sweep was revised to 75%, stepping down to 50% at total net leverage of 3.5 times, 25% at total net leverage of 2.75 times and 0% at total net leverage of 2 times, from 50% with step-downs to 25% at 3.75 times total net leverage and 0% at 3 times total net leverage.

In addition, the maturity of the revolver was shortened to 4.5 years from five years and the maturity of the term loan B was shortened to five years from seven years, the source continued.

Another change was that the incremental allowance was reduced to $10 million plus unlimited amounts up to closing total net leverage from $40 million plus unlimited amounts up to closing total net leverage.

Furthermore, a $10 million available amount starter basket was removed, a $20 million general restricted payments basket was removed and a leverage prong on all ratio-based negative covenants was reduced by 0.75 times.

And, the total net leverage covenant was modified to 6 times through Sept. 30 from 6.75 times, 5.75 times through Dec. 31 from 6.5 times, 5.5 times through June 30, 2018 from 6.25 times, 5.25 times through March 31, 2019 from 6 times and 4.25 times through March 31, 2020 from 5 times.

The term loan B still has a 1% Libor floor and an original issue discount of 99.

Barclays is the lead bank on the deal.

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

Proceeds will be used to refinance the company’s existing term loan, fund a dividend to shareholders and pay transaction related fees and expenses.

KeyPoint is a Loveland, Colo.-based provider of background investigative services for the federal government.

© 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.