Autokiniton finalizes $250 million term loan B discount at 95

By Sara Rosenberg

New York, Sept. 26 – Autokiniton Global Group set the original issue discount on its $250 million term loan B (B2/B+) due May 2025 at 95, the wide end of the revised 95 to 96 talk and wide of initial talk of 98.5, according to a market source.

Pricing on the term loan B is Libor plus 575 basis points with a 0% Libor floor.

The term loan B has 101 soft call protection for one year and amortization of 2.5% in year one and 5% per annum onwards.

The company’s $475 million of senior secured credit facilities also include a $100 million pre-placed term loan A due March 2024 and a $125 million incremental asset-based revolver.

Pricing on the term loan A is Libor plus 525 bps with a 0% Libor floor.

The term loan A has 101 soft call protection for six months, and amortization of 2.5% in year one, 7.5% in year two and 10% per annum onwards.

Previously in syndication, the term loan B was downsized from $400 million, pricing was increased from talk in the range of Libor plus 525 bps to 550 bps, the call protection was extended from six months and amortization was raised from 1% per annum. Also, the term loan A was added to the capital structure, the MFN was set at 50 bps for life with no carve-outs, the pari debt incurrence test was reduced to 3x net first-lien leverage from 3.8x, the unlimited restricted payment test was reduced to 2.3x net total leverage from 2.55x, and the unlimited investments test was reduced to 2.8x net total leverage from 3.05x.

Goldman Sachs Bank USA, BofA Securities, Inc., Barclays, RBC Capital Markets and KKR Capital Markets are the joint lead arrangers on the deal.

Allocations went out on Thursday.

Proceeds will be used to help fund the acquisition of Tower International Inc. for $31.00 per share in cash. Including Tower’s debt and pension related liabilities, the total value of the transaction is about $900 million.

Other funds for the transaction will come from equity.

Closing is subject to the tender of at least a majority of the outstanding shares of Tower common stock and regulatory approval.

Autokiniton, a portfolio company of KPS Capital Partners, is a New Boston, Mich.-based supplier of metal-formed components and complex assemblies to the automotive industry. Tower is a Livonia, Mich.-based manufacturer of engineered automotive structural metal components and assemblies.

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