Sequa lifts first-lien term loan to $920 million, adjusts pricing

By Sara Rosenberg

New York, April 24 – Sequa Corp. upsized its 4.5-year covenant-light first-lien term loan B to $920 million from a revised amount of $900 million and an initial size of $600 million, according to a market source.

Also, pricing on the first-lien term loan was reduced to Libor plus 550 basis points from Libor plus 575 bps, and pricing on the company’s $350 million five-year covenant-light second-lien term loan was trimmed to Libor plus 900 bps from talk of Libor plus 1,000 bps to 1,050 bps, the source said.

In addition, the original issue discount on the first-lien term loan changed to 99.5 from 99, and the discount on the second-lien term loan was revised to 99 from 98.

And, the call protection on the first-lien term loan was shortened to a 101 soft call for six months from one year, and the call protection on the second-lien term loan was changed to non-callable for one year, then at 102 in year two and 101 in year three from non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

Both term loans still have a 1% Libor floor.

The company’s now $1,405,000,000 in senior secured credit facilities also provide for a $135 million revolver.

Barclays is the left lead on the deal.

Recommitments are due at 5 p.m. ET on Tuesday.

Proceeds will be used for a recapitalization/refinancing of existing debt.

The first upsizing to the first-lien term loan was done because the company eliminated plans to sell $300 million of first-lien senior secured bonds, and this newest upsizing was done to pre-fund the redemption of stub notes.

The company currently expects that $30 million of its notes won’t be exchanged so the minimum threshold will be reduced and the notes will remain outstanding but will be redeemed at some point post-closing, the source explained.

Sequa is a Palm Beach Gardens, Fla.-based aerospace and diversified industrial company.

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