Quanex Building sets price talk in $310 million covenant-light loan

By Paul A. Harris

Portland, Ore., Sept. 15 – Quanex Building Products Corp. talked its $310 million seven-year covenant-light term loan B with a 375 basis points spread to Libor atop a 1% Libor floor, at a reoffer price of 99, according to a market source.

The spread comes 50 bps inside of earlier expectations of Libor plus 425 bps with a 1% Libor floor, which appeared in document that the company filed with the Securities and Exchange Commission.

Commitments are due Sept. 29.

The term loan has 101 soft call protection for six months.

Wells Fargo Securities LLC is the lead arranger and bookrunner.

The $410 million senior secured credit facility also includes a $100 million five-year asset-based revolver.

According to SEC filings initial revolver pricing is expected at Libor plus 150 basis points and then could range from Libor plus 150 bps to 200 bps based on average excess availability.

The revolver is also expected to have a commitment fee of 25 bps or 37.5 bps based on average daily usage.

Proceeds will be used to help fund the acquisition of Woodcraft Industries for about $248.5 million, to refinance existing debt and for general corporate purposes

Other funds for the transaction will come from cash on hand.

Pro forma debt to EBITDA at close is expected to be 3.2 times.

Closing is targeted for the fourth quarter.

Quanex is a Houston-based supplier of window and door components. Woodcraft is a St. Cloud, Minn.-based supplier of doors and components to original equipment manufacturers in the kitchen and bathroom cabinet industry.

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