Coveris flexes $350 million term loan to Libor/Euribor plus 350 bps

By Sara Rosenberg

New York, July 28 – Coveris Holdings SA lowered pricing on its fungible $350 million-equivalent U.S. dollar and euro add-on term loan (B2) due May 8, 2019 to Libor/Euribor plus 350 basis points from Libor/Euribor plus 375 bps, according to a market source.

Also, the original issue discount on the loan tightened to 99.51 from talk of 99 to 99.5, the source said. The discount will maintain tax fungibility with the existing term loans.

The term loan still has a 1% floor.

Goldman Sachs Bank USA, Credit Suisse International and J.P. Morgan Ltd. are the joint lead arrangers for the deal.

Proceeds will be used to redeem Coveris Holding Corp.’s 10% senior notes due 2018, to repay a portion of the amounts outstanding under the North American and United Kingdom asset-backed revolving credit facilities and to pay transaction fees and expenses.

With the add-on, the company is looking to amend its existing senior secured term loan to allow for the new debt and the repayment of the notes and to provide additional capacity for, among other things, additional debt, restricted payments, dispositions, investments and acquisitions.

As before, lenders are being offered a 25 bps amendment fee.

Recommitments and consents are due by 8 a.m. ET on Friday, the source added.

Closing on the incremental loan and amendment is expected in August.

Currently, the company has a $342.2 million term loan due May 8, 2019 priced at Libor plus 350 bps with a 1% Libor floor and a €244.7 million term loan due May 8, 2019 priced at Euribor plus 350 bps with a 1% floor.

Pricing on the existing term loan debt was going to be revised to match the add-on term loan pricing, but due to the flex on the add-on loan, no spread change is necessary on the existing loans.

Net secured leverage is 2.9 times and net total leverage is 4.5 times based on last-12-months first-quarter 2016 pro forma adjusted EBITDA, including synergies, of $358.8 million.

Coveris, a Sun Capital Partners Inc. portfolio company, is a Chicago-based manufacturer and distributor of packaging solutions and coated film technologies.

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