K&N Engineering shifts funds between term loans, updates pricing

By Sara Rosenberg

New York, Oct. 19 – K&N Engineering Inc. upsized its seven-year first-lien term loan B (B2/B+) to $245 million from $235 million and downsized its eight-year second-lien term loan (Caa2/CCC+) to $100 million from $110 million, according to a market source.

Also, pricing on the first-lien term loan B firmed at Libor plus 475 basis points, the high end of the Libor plus 450 bps to 475 bps talk, and pricing on the second-lien term loan finalized at Libor plus 875 bps, the wide end of the Libor plus 850 bps to 875 bps talk, the source said.

Furthermore, the 101 soft call protection on the first-lien term loan B was extended to one year from six months.

As before, both term loans have a 1% Libor floor, the first-lien term loan B has an original issue discount of 99 and amortization of 1% per annum, and the second-lien term loan has a discount of 98 and call protection of 102 in year one and 101 in year two.

The company’s $385 million senior secured credit facility also includes a $40 million revolver (B2/B+).

Recommitments were scheduled to be due at 2 p.m. ET on Wednesday, the source added.

Goldman Sachs Bank USA, UBS Investment Bank and KeyBanc Capital Markets are the joint bookrunners on the deal.

Proceeds will be used to help fund the buyout of the company by GS Merchant Bank.

K&N is a Riverside, Calif.-based designer and manufacturer of high performance automotive and powersports aftermarket products.

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