Sequa launches loan extension, offers 175 bps bump in spread

By Sara Rosenberg

New York, July 14 – Sequa Corp. is seeking to extend its existing capital structure by about two years across all tranches and will increase pricing on its extended loans by 175 basis points, according to a market source.

The company is also raising a $200 million five-year pari passu first-lien term loan that is being pre-placed with certain existing lenders and $56 million of new preferred equity backstopped fully by the sponsor, Carlyle, the source said.

The pre-placed term loan is non-callable for two years.

Proceeds from the term loan and equity will be used to provide about $135 million of additional liquidity, to fund an up to $100 million repayment of the existing term loans, and to pay transaction fees, expenses and original issue discount.

Lenders have the option to receive either a partial paydown or a 2.5% PIK fee.

In addition, consenting term loan lenders will receive a 50 bps in consent fee and a first-out priority over non-extending lenders.

The transaction is designed to provide Sequa the maturity runway and liquidity profile to manage through the Covid-19 downturn and is leverage neutral, the source continued.

Barclays is the agent on the new loan and will remain the agent on the existing debt.

Commitments are due at 5 p.m. ET on July 23, the source added.

Sequa is a diversified aerospace and industrial company that produces a broad range of products and services through two business segments: Chromalloy and Precoat.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.