Sedgwick Claims firms $2.34 billion term loan at Libor plus 325 bps

By Sara Rosenberg

New York, Nov. 5 – Sedgwick Claims Management Services Inc. finalized pricing on its $2.34 billion seven-year covenant-light term loan B (B2/B) at Libor plus 325 basis points, the low end of the Libor plus 325 bps to 350 bps talk, according to a market source.

Also, the company added a step-down to the term loan to Libor plus 300 bps at 4.5 times net first-lien leverage and tightened the original issue discount to 99.75 from 99.5, the source said.

The term loan still has a 0% Libor floor, 101 soft call protection for six months and amortization of 1% per annum.

Bank of America Merrill Lynch, KKR Capital Markets, Morgan Stanley Senior Funding Inc. and SunTrust Robinson Humphrey Inc. are the lead arrangers on the deal.

Commitments were scheduled to be due at noon ET on Monday, the source added.

Proceeds will be used to help fund the buyout of the company by the Carlyle Group from KKR in a transaction valued at about $6.7 billion.

Other funds for the buyout will come from equity.

Closing is expected later this year, subject to customary conditions, including regulatory approvals.

Funds managed by Stone Point Capital LLC and Caisse de depot et placement du Quebec (CDPQ), together with Sedgwick management, will remain minority investors in the company.

Sedgwick is a Memphis, Tenn.-based provider of claims management solutions to corporations, public entities and insurance carriers.

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