Leidos launches $2.76 billion credit facilities to investors

By Sara Rosenberg

New York, Aug. 6 – Leidos Innovations Corp. launched on Monday $2,759,300,000 of senior secured credit facilities, according to a market source.

Citigroup Global Markets Inc. is the lead bank on the deal.

The facilities consist of a $750 million revolver, a $635 million term loan A, a $265.4 million term loan A-5 and a $1,108,900,000 covenant-light term loan B due Aug. 22, 2025, the source said.

Price talk on the term loan B is Libor plus 175 basis points with a 0% Libor floor and an original issue discount of 99.75.

The term loan B has 101 soft call protection for six months and amortization of 1% per annum.

The accordion is not to exceed the sum of $1.2 billion and an amount subject to senior secured net leverage ratio of 3 times.

Mandatory prepayments are from equal to the lesser of 50% of excess cash flow, stepping down to 0% upon senior secured net leverage of 2 times, and the dollar amount that would result in the senior secured net leverage being less than or equal to 2 times, 100% of asset sale proceeds, stepping down to 50% and 0% at senior secured net leverage of 2.75 times and 2 times, respectively, subject to reinvestment rights, and 100% of debt issuance proceeds other than permitted debt.

Proceeds will be used to amend and extend existing credit facilities. The term loan B is being extended by two years.

As part of the amendment, the permitted receivables covenant will be changed to provide clarification and allow such program not to exceed $400 million, versus $100 million currently, the senior secured leverage ratio will be changed to provide for the ability to net cash up to $350 million, and the leverage ratio will be modified to a net leverage ratio with the ability to net cash up to $350 million, the source added.

Existing term loan B lender commitments are due at noon ET on Aug. 14 and new lender commitments are due at noon ET on Aug. 15.

Closing is expected on Aug. 22.

Leidos is a Reston, Va.-based provider of technology and sector expertise to customers in national security, health and engineering.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.