Southern Graphics wraps after shifting funds between term loans

By Sara Rosenberg

New York, Nov. 27 – Southern Graphics Inc. completed syndication of its credit facilities after upsizing its five-year covenant-light first-lien term loan to $495 million from $480 million and downsizing its six-year covenant-light second-lien term loan to $105 million from $120 million, according to a market source.

Pricing on the first-lien term loan remained at Libor plus 350 basis points with a 0% Libor floor, but the original issue discount was tightened to 99.75 from 99.5, the source said. The loan includes a step-down to Libor plus 325 bps at 3.75 times net first-lien leverage and 101 soft call protection for six months.

The second-lien term loan priced in line with talk at Libor plus 750 bps with a 0% Libor floor and a discount of 99. This tranche has hard call protection of 102 in year one and 101 in year two.

The company’s $755 million of credit facilities also provide for a $75 million revolver and an $80 million covenant-light first-lien delayed-draw term loan.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are the lead banks on the deal.

Proceeds will be used to repay existing debt, and the delayed-draw term loan is expected to be used for acquisition financing.

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

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