Smile Brands sweetens $260 million term loan call premiums to 102, 101

By Sara Rosenberg

New York, Aug. 13 - Smile Brands Group Inc. revised the call protection on its $260 million six-year first-lien term loan to a hard call of 102 in year one and 101 in year two from a 101 soft call for one year, according to a market source.

The call protection excludes change-of-control transactions, which carry a 101 premium for one year.

Also, the deal saw the addition of a maximum capital expenditure covenant of $35 million per annum up to and including Dec. 31, 2015 and $40 million per annum thereafter, and the maximum leverage and minimum interest coverage covenant levels were modified, the source said.

Under the restricted payments, the company has the ability to pay cash interest on holdco mezzanine notes subject to minimum fixed charge coverage test of 1.10 times.

Price talk on the term loan is still Libor plus 625 basis points with a 1.25% Libor floor and an original issue discount of 98.

The $310 million credit facility (B1/B-) also includes a $50 million five-year revolver.

Recommitments are due at 2 p.m. ET on Wednesday, the source added.

Credit Suisse Securities (USA) LLC, Jefferies Finance LLC, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC are the lead banks on the deal.

Proceeds will be used to refinance existing debt.

Smile Brands is an Irvine, Calif.-based provider of support services to dental offices.

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