Culligan ups incremental loan size, sets spread at Libor plus 350 bps

By Sara Rosenberg

New York, July 27 – Culligan Holding Inc. upsized its incremental covenant-light senior secured term loan B due Dec. 13, 2023 to $345 million from $335 million, according to a market source.

The company also firmed pricing on the incremental loan as well as on the repricing of its existing $298.5 million covenant-light term loan B-1 due Dec. 13, 2023 at Libor plus 350 basis points, the low end of the Libor plus 350 bps to 375 bps talk, and added a step-down to Libor plus 325 bps at 0.75 times below closing net first-lien leverage, the source said.

In addition, the original issue discount on the incremental term loan was tightened to 99.875 from 99.5.

The term loans still have a 1% Libor floor and 101 soft call protection for six months, and the repricing is still offered at par.

The incremental term loan B is at an Australian borrower, and the term loan B-1 is at a U.S. borrower.

Morgan Stanley Senior Funding Inc., RBC Capital Markets LLC, BMO Capital Markets Corp. and Citigroup Global Markets Inc. are the lead banks on the deal.

Commitments/consents were scheduled to be due at 5 p.m. ET on Thursday, the source added.

Proceeds from the incremental loan will be used to fund the acquisition of Zip Industries and to refinance an existing euro term loan B, and the repricing will take the term loan B-1 down from Libor plus 400 bps with a 1% Libor floor.

The upsizing to the incremental loan was done to account for foreign exchange rates.

Closing on the acquisition is expected in August.

Culligan is a Rosemont, Ill.-based provider of water treatment products and services. Zip Industries is an Australian supplier of instant drinking water appliances.

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