Sotheby’s trims term B to $500 million, firms at Libor plus 550 bps

By Sara Rosenberg

New York, Sept. 23 – Sotheby’s downsized its term loan B due January 2027 to $500 million from $550 million and set pricing at Libor plus 550 basis points, the high end of revised talk of Libor plus 525 bps to 550 bps and up from initial talk in the range of Libor plus 450 bps to 475 bps, according to a market source.

Additionally, the Libor floor on the term loan was changed to 1% from 0%, the original issue discount widened to 98 from 99 and the 101 soft call protection was extended to one year from six months, the source said.

Furthermore, the MFN was modified to 50 bps for life from 75 bps and all carve-outs were removed, and the permitted earlier maturity debt basket was removed.

Under restricted payments, the unlimited basket was revised to 4x from 4.5x, the general basket was changed to the greater of $45 million and 20% of EBITDA from the greater of $65 million and 30% of EBITDA, and a cap of $25 million was added on investments in non-guarantor restricted subsidiaries.

Also, the company is now required to hold quarterly investor calls.

The company’s now $900 million of credit facilities (B1/B+), down from $950 million, also provide for a $400 million revolver.

BNP Paribas Securities Corp. and Goldman Sachs Bank USA are the joint physical bookrunners on the deal.

Proceeds will be used with $600 million of senior secured notes, which were upsized from $550 million with the term loan downsizing, to help fund the acquisition of the company by BidFair USA for $57 in cash per share of common stock in a transaction with an enterprise value of $3.7 billion.

Closing is expected in the fourth quarter, subject to customary conditions, including regulatory clearance and shareholder approvals. The transaction is not subject to the availability of financing.

Sotheby’s is a New York-based auction house.

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