DexKo shifts funds between U.S. and euro term loans, cuts pricing

By Sara Rosenberg

New York, Sept. 23 – DexKo Global Inc. upsized its seven-year covenant-lite first-lien term loan B to $1.06 billion from $960 million by increasing the delayed-draw tranche to $170 million from $160 million, according to a market source.

The company downsized its euro seven-year covenant-lite first-lien term loan B to $1.15 billion equivalent from $1.25 billion equivalent by decreasing the delayed-draw tranche to $110 million equivalent from $120 million equivalent.

Also, pricing on the U.S. term loan was reduced to Libor plus 375 basis points from talk in the range of Libor plus 400 bps to 425 bps and pricing on the euro term loan was lowered to Euribor plus 400 bps from Euribor plus 425 bps, the source said.

In addition, the company removed from the U.S. term loan the 25 bps pricing step-downs at 0.5x and 1x inside closing first-lien net leverage, but added a 25 bps step-down upon a qualifying initial public offering.

The 25 bps step-down at 0.5x inside closing first-lien net leverage was removed from the euro term loan, but this tranche still has 25 bps step-down at 1x inside closing first-lien net leverage, and gained a 25 bps step-down upon a qualifying initial public offering.

Ticking fees on the U.S delayed-draw term loan were changed to half the margin from days 61 to 120 and the full margin thereafter from half the margin from days 61 to 180 and the full margin thereafter, the source continued.

The U.S. term loan still has a 0.5% Libor floor and amortization of 1% per annum, the euro term loan still has a 0% floor and no amortization, and both term loans still have an original issue discount of 99.5 and 101 soft call protection for six months.

Credit Suisse is the physical bookrunner and agent on the deal. Other bookrunners include Deutsche Bank Securities Inc., BMO Capital Markets, BofA Securities Inc., Barclays, BNP Paribas Securities Corp., CIBC, Goldman Sachs, RBC Capital Markets and TD Securities.

Euro recommitments are due at 7 a.m. ET on Friday and allocations are expected on Friday, the source added.

Proceeds will be used to help fund the acquisition of the company by Brookfield Business Partners LP from KPS Capital Partners LP for $3.4 billion, and pay transaction fees and expenses.

DexKo is a Novi, Mich.-based producer of highly engineered products critical to safety and performance of towable industrial trailer and recreational trailer applications.

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