Asurion to launch $875 million incremental term loans on Thursday

By Sara Rosenberg

New York, March 7 - Asurion LLC is scheduled to hold a conference call at 10:30 a.m. ET on Thursday to launch $875 million of add-on term loans, according to a market source.

Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch, Goldman Sachs & Co., Barclays Capital Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are the joint lead arrangers and bookrunners on the deal.

The debt is comprised of an at least $575 million first-lien add-on term loan and an up to $300 million second-lien add-on term loan, the source said.

The new loans are being layered into the company's first- and second-lien debt that was placed in May 2011.

At close, the existing first-lien term loan was sized at $2.2 billion and priced at Libor plus 400 basis points with a 1.5% Libor floor. It was sold at an original issue discount of 99 and includes 101 soft call protection.

Meanwhile, the existing second-lien term loan was sized at $1.27 billion and priced at Libor plus 750 bps with a 1.5% Libor floor. This debt was sold at an original issue discount of 99½ and is non-callable for one year, then at 103 in year two and 101 in year three.

The coupon and Libor floor on the new add-ons will match that of the existing term loans, but the original issue discounts will be different, the source remarked.

Proceeds from the add-ons will be used to repay the $575 million first-lien term loan at NEW Holdings and tender for the $300 million unsecured term loan at NEW Holdings.

The company is tendering for the unsecured term loan at a price of 102, and the transaction is subject to at least 50.1% of the debt being redeemed, the source continued.

If less than 100% of the unsecured loan is repurchased, the company will amend the unsecured loan to strip affirmative and negative covenants.

Morgan Stanley is the auction manager on the tender offer and Bank of America is the administrative agent.

Commitments are due at noon ET on Tuesday.

Asurion is a Nashville-based provider of technology protection services.

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