Armstrong to launch $250 million add-on term loan B on Tuesday

By Sara Rosenberg

New York, March 12 - Armstrong World Industries Inc. is set to hold a conference call at 4 p.m. ET on Tuesday to launch a proposed $250 million add-on term loan B, according to a market source.

Bank of America Merrill Lynch, J.P. Morgan Securities Inc. and Barclays Capital Inc. are the lead banks on the deal.

The loan is talked at Libor plus 300 basis points with a 1% Libor floor, in line with existing term loan pricing, the source said, adding that the original issue discount is still to be determined.

Proceeds will be used to help fund a special cash dividend of about $500 million, or about $8.55 per share.

The special cash dividend is conditioned on the company's receipt of consents from current lenders and financing.

It is expected that the dividend will be paid before May 1.

"Given the company's cash generation and earnings progress achieved in 2011, we are below our target leverage of 2 to 3 times net debt/EBITDA, and this contemplated action would help to return us to a more efficient capital structure," Tom Mangas, senior vice president and chief financial officer, said in a news release.

Armstrong is a Lancaster, Pa.-based designer and manufacturer of floors, ceilings and cabinets.

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