Milk Specialties trims first-lien loan to $125 million; ups spreads

By Sara Rosenberg

New York, Dec. 13 - Milk Specialties Global downsized its first-lien term loan (B2/B+) to $125 million from $145 million and increased pricing to Libor plus 700 basis points from Libor plus 650 bps, according to a market source.

Also, the original issue discount on the first-lien term loan moved to 97, the high end of the initial 97 to 98 guidance, the source said.

Meanwhile, the company's $60 million second-lien term loan (CCC+) was flexed up to Libor plus 1,300 bps from Libor plus 1,050 bps and the discount moved to 96, from talk of 96 to 97, the source added.

The 1.5% Libor floor on both the first- and second-lien term loans was left unchanged.

As before, the second-lien term loan is non-callable for one year, then at 102 in year two and at 101 in year three.

RBC Capital Markets LLC is the lead bank on the now $220 million credit facility, down from $240 million, which still includes a $35 million revolver (B2/B+).

Allocations are expected to go out next week, the source said.

Proceeds will be used to help fund the buyout of the company by HM Capital from Stonehenge Partners Inc.

To make up for the first-lien term loan downsizing, $20 million more of equity will be used for the transaction.

Milk Specialties is a Carpentersville, Ill.-based manufacturer of nutrition products.

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