Zep releases first- and second-lien term loan price talk

By Sara Rosenberg

New York, July 27 – Zep Inc. came out with price talk on its $550 million covenant-light first-lien term loan (B-) and its $175 million covenant-light second-lien term loan (CCC), according to a market source.

The first-lien term loan is talked at Libor plus 400 basis points to 425 bps with a 1% Libor floor and an original issue discount of 99, and the second-lien term loan is talked at Libor plus 825 bps with a 1% Libor floor and a discount of 98, the source said.

Included in the first-lien term loan is 101 soft call protection for six months, and the second-lien term loan has hard call protection of 102 in year one and 101 in year two.

The company’s $770 million of credit facilities also include a $45 million revolver (B-).

KeyBanc Capital Markets LLC is the lead on the deal that launched with a bank meeting on Wednesday.

Commitments are due on Aug. 8, the source added.

Proceeds will be used to refinance existing debt, to finance a distribution and to fund an acquisition.

Zep is an Atlanta-based consumable chemical packaged goods company.

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