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ServiceMaster ups pricing on extended term loan to Libor plus 425 bps
By Sara Rosenberg
New York, Aug. 16 - ServiceMaster Co. increased pricing on its proposed extended term loan to Libor plus 425 basis points from Libor plus 400 bps, according to a market source.
Non-extended pricing is Libor plus 250 bps.
Lenders are still being offered a 10 bps consent fee and a 15 bps extension fee.
The company is looking to extend a portion of its $2.5 billion senior secured term loan to Jan. 31, 2017 from July 24, 2014.
Aside from the pricing change, the company is now allowing lenders to extend a portion of their current term loan position, as opposed to requiring all or none, the source said.
In an 8-K filed on Thursday, ServiceMaster said that it expects the extended loan size to be around $1 billion after giving effect to a planned paydown.
The company plans on using about $300 million from a restructured $750 million senior unsecured notes offering to repay some term loan borrowings.
About $396 million of the remaining proceeds from the new notes will be used to redeem 10¾% senior notes due 2015 and any additional proceeds will be used for general corporate purposes.
Previously, the company was planning on using $500 million of proceeds for the paydown from a $1 billion bond deal, but those notes, which priced on Aug. 8 at par to yield 6 1/8%, have been withdrawn.
The paydown of the extended term loan will not exceed 50% of the extended commitments that elect a repayment.
The notes are being done in connection with, but are not conditioned on, the term loan extension.
J.P. Morgan Securities LLC is leading the extension request.
Updated signature pages were due at 4 p.m. ET on Thursday, the source added.
ServiceMaster is a Memphis-based provider of maintenance services to residential and commercial customers.
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