Guidehouse increases spreads on first- and second-lien term loans

By Sara Rosenberg

New York, Oct. 2 – Guidehouse raised pricing on its fungible $640 million incremental covenant-lite first-lien term loan (B1/B-) to Libor plus 450 basis points from talk in the range of Libor plus 375 bps to 400 bps, according to a market source.

Also, pricing on the $200 million incremental covenant-lite second-lien term loan (Caa1/CCC) was increased to Libor plus 850 bps from talk in the range of Libor plus 800 bps to 825 bps and the tranche was revised to non-fungible from fungible, the source said.

As before, the first-lien term loan has a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and the second-lien term loan has a 0% Libor floor, a discount of 98.5 and hard call protection of 102 in year one and 101 in year two.

The company is also upsizing its existing revolving credit facility to $125 million from $50 million.

RBC Capital Markets, Macquarie Capital (USA) Inc., UBS Investment Bank and Credit Suisse Securities (USA) LLC are the leads on the deal.

Commitments are due at noon ET on Friday, the source added.

Proceeds will be used to help fund the acquisition of Navigant Consulting Inc. for $28 in cash per share in a transaction valued at about $1.1 billion.

Closing is expected in the fourth quarter, subject to regulatory approvals and customary conditions.

With this transaction, pricing on the company’s existing first-lien term loan will increase from Libor plus 300 bps to match the incremental first-lien term loan, and pricing on the existing second-lien term loan will be lifted to Libor plus 800 bps from Libor plus 750 bps because of MFN.

Guidehouse, a portfolio company of Veritas Capital, is a provider of management consulting services to government clients. Navigant is a Chicago-based professional services firm.

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