Quikrete launches $1.5 billion term loan B at Libor plus 275 bps

By Sara Rosenberg

New York, April 8 – Quikrete Holdings Inc. launched on Thursday its $1.5 billion seven-year incremental covenant-lite term loan B (Ba3/BB-) with price talk of Libor plus 275 basis points with a 0% Libor floor and an original issue discount of 99 to 99.5, according to a market source.

Included in the incremental term loan is 101 soft call protection for six months and a ticking fee of half the margin from days 46 to 90 and the full margin plus Libor thereafter.

Amortization is 1% per annum.

Mandatory repayments are from 100% of debt issuance excluding permitted indebtedness, 100% of asset sales and insurance proceeds, subject to reinvestment rights, and 50% excess cash flow sweep when total leverage is greater than 4.25x and 25% when leverage is greater than 3.75x.

Security is a first priority lien on all assets of the borrower and guarantors, excluding ABL revolver collateral, pledge of capital stock and a second priority lien on collateral pledged to the ABL revolver.

Wells Fargo Securities LLC is the lead arranger on the deal.

Along with the incremental term loan, the company is seeking consent from existing term loan B and term loan B-1 lenders to waive mandatory repayment rights for any required divestitures, such that the proceeds are directed to the additional debt financing commitment in the event it funds.

Amendment consents are due at 3 p.m. ET on Tuesday, and commitments for the incremental loan are due at noon ET on April 16.

Proceeds will be used to help fund the acquisition of Forterra Inc. for $24.00 per share in an all-cash transaction valued at $2.74 billion, including outstanding debt.

Closing is expected in the fourth quarter, subject to receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.

Quikrete is an Atlanta-based buildings materials company. Forterra is an Irving, Tex.-based manufacturer of water and drainage infrastructure pipe and products.

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