Steinway lifts first- and second-lien term loan sizes, flexes lower

By Sara Rosenberg

New York, Sept. 11 - Steinway Musical Instruments Inc. upsized its six-year first-lien term loan (B1) to $200 million from $190 million and its seven-year second-lien term loan (Caa1) to $110 million from $100 million, according to a market source.

Also, pricing on the first-lien term loan was reduced to Libor plus 375 basis points from Libor plus 425 bps, and pricing on the second-lien term loan was trimmed to Libor plus 825 bps from Libor plus 850 bps, the source said.

Furthermore, the original issue discount on the second-lien loan was revised to 99 from 98, the source said.

As before, both term loans have a 1% Libor floor, the first-lien loan has an original issue discount of 99½ and 101 soft call protection for one year, and the second-lien loan has call protection of 103 in year one, 102 in year two and 101 in year three.

Bank of America Merrill Lynch and Deutsche Bank Securities Inc. are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by Paulson & Co. Inc. for $40 per share, or about $512 million.

As a result of the term loan upsizings, the amount of equity being used for the buyout was reduced.

With this transaction, the company is also expected to get a $75 million five-year asset-based revolver at Libor plus 175 bps with a 37.5 bps unused fee, filings with the Securities and Exchange Commission have stated.

Steinway is a Waltham, Mass.-based musical instruments company.

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