SGS ups term loan to $400 million, carves out delayed-draw piece

By Sara Rosenberg

New York, Oct. 3 - Southern Graphics Inc. (SGS International Inc.) increased its seven-year first-lien covenant-light term loan to $400 million from $375 million, according to a market source.

Of the total term loan amount, $365 million will be funded and there is now a $35 million delayed-draw tranches that has a ticking fee of half the spread after 30 days and the full spread after 60 days, the source said.

Price talk on the term loan is still Libor plus 425 basis points with a 1.25% Libor floor and an original issue discount of 99.

The loan has 101 soft call protection for one year.

The company's now $475 million credit facility (B1/B), up from $450 million, also includes a $75 million five-year revolver.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Bank of America Merrill Lynch and Goldman Sachs & Co. are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by Onex Corp. from Court Square Capital Partners for $813 million. The delayed-draw loan will be for acquisition financing.

Closing is expected in the fourth quarter, subject to customary regulatory approvals.

Southern Graphics is a Louisville, Ky.-based provider of design-to-print graphics services to the consumer products packaging industry.

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