Authentic Brands reveals first- and second-lien incremental loan talk

By Sara Rosenberg

New York, June 11 – Authentic Brands Group came out with price talk on its $195 million in incremental term loans that launched with a call on Thursday, according to a market source.

The $120 million incremental first-lien covenant-light term loan (B1/B+) due May 27, 2021 is talked at Libor plus 450 basis points with a 1% Libor floor and an original issue discount of 99, and the $75 million incremental second-lien covenant-light term loan (Caa1/CCC+) due May 27, 2022 is talked at Libor plus 850 bps with a 1% Libor floor and a discount of 99, the source said.

The spread on the incremental first-lien term loan matches the existing first-lien term loan, while the spread on the incremental second-lien loan is 50 bps higher than current second-lien pricing.

Call protection on the first-lien loan is a 101 soft call for one year, and the second-lien loan has hard call protection of 102 in year one and 101 in year two.

Of the total incremental first-lien loan, $35 million is delayed-draw, and $15 million of the incremental second-lien loan is delayed-draw.

The delayed-draw ticking fee is half the spread from days 31 to 60 and the full spread but no floor from days 61 to 180.

Existing first-lien lenders are being offered a 25 bps amendment fee and second-lien lenders are being offered a 50 bps amendment fee.

Commitments are due on June 18, the source added.

Bank of America Merrill Lynch is the lead bank on the deal.

Proceeds will be used to fund a distribution to shareholders that will primarily be used to return equity used for the Jones New York acquisition, to refinance revolver borrowings used for the Frederick’s of Hollywood acquisition, and to fund potential future acquisitions.

Authentic Brands is a New York-based brand development and licensing company.

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