Allied Universal adds pricing step-downs to U.S. term loans

By Sara Rosenberg

New York, May 4 – Allied Universal added pricing step-downs to its $950 million incremental covenant-lite first-lien term loan B (B2/B/BB-) due May 2028 and repriced and extended $2.192 billion first-lien term loan (B2/B/BB-) due May 2028, according to a market source.

Initial pricing on the term loan debt remained at Libor plus 375 basis points, but now there is a 25 bps step-down after 0.5x of total net leverage deleveraging and a 25 bps step-down at B1/B+ ratings with stable outlooks, the source said.

As before, the term loan debt has a 0.5% Libor floor and 101 soft call protection for six months, the incremental term loan has an original issue discount of 99.5 and the repriced and extended term loan has a 25 bps extension fee.

Previously in syndication, pricing on the incremental term loan was set at the low end of the Libor plus 375 bps to 400 bps talk, the Libor floor was reduced from 0.75%, the discount was tightened from 99 and the debt was made fungible with the existing first-lien term loan B. Also, the repricing and extension of the existing term loan was added to the transaction.

Along with the U.S. incremental term loan, the company plans on getting a €715.5 million seven-year covenant-lite first-lien term loan B (B2/B/BB-) priced at Euribor plus 375 bps with a 0% floor and a discount of 99.5.

Pricing on the euro term loan finalized at the low end of the Euribor plus 375 bps to 400 bps talk and the discount was revised from 99.

Credit Suisse, Morgan Stanley, Deutsche Bank, BNP Paribas, HSBC Securities, Mizuho, Societe Generale, ING Capital LLC, MUFG and Truist Securities are the bookrunners on the deal, with Credit Suisse the left lead and agent.

Recommitments are due at 10 a.m. ET on Wednesday, the source added.

Proceeds from the incremental term loan debt and $2.96 billion of notes in multiple tranches will be used to fund the acquisition of G4S plc for 245 pence in cash per share in a transaction valued at £3.8 billion, and the repricing and extension will reprice the existing term loan from Libor plus 425 bps with a 0% Libor floor and extend the maturity from July 2026.

Warburg Pincus and CDPQ are the sponsors.

Allied Universal is a Santa Ana, Calif.-based provider of security services. G4S is a London-based security services company.

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