CoAdvantage widens pricing on first- and second-lien term loans

By Sara Rosenberg

New York, Sept. 18 – CoAdvantage (AQ Carver Buyer Inc.) increased pricing on its $325 million seven-year covenant-lite first-lien term loan (B2/B) to Libor plus 500 basis points from Libor plus 450 bps and on its $130 million eight-year covenant-lite second-lien term loan (Caa2/CCC) to Libor plus 900 bps from Libor plus 850 bps, according to a market source.

In addition, the original issue discount on the first-lien term loan was changed to 99 from 99.5 and the discount on the second-lien term loan widened to 98 from 99, the source said.

Also, MFN was revised to 50 bps for life from 75 bps for six months and the MFN carve-outs were eliminated.

Regarding the incremental, it was reduced to the greater of $48.75 million and 75% of LTM EBITDA from the greater of $65 million and 100% of LTM EBITDA, the unlimited ratio was modified to 4.75x net first-lien leverage from 5x, and the $50 million inside maturity carve-out was eliminated, the source continued.

Other changes included eliminating the asset sale step-downs from mandatory prepayments, reducing the unlimited investments ratio to 0.75x inside closing total net leverage from 0.25x inside closing total net leverage, lowering the unlimited junior debt prepayments ratio to 1x inside closing total net leverage from 0.75x inside closing total net leverage, reducing the available amount to $16.25 million with no grower component from the greater of $32.5 million and 50% of LTM EBITDA, and adding a 25% cap under EBITDA.

The term loans still have a 0% Libor floor.

The company’s $500 million of credit facilities also provide for a $45 million revolver (B2/B).

Deutsche Bank Securities Inc., Antares Capital and Madison Capital are the bookrunners on the deal.

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

Proceeds will be used to help fund the buyout of the company by Aquiline Capital Partners from investment funds managed by Morgan Stanley Capital Partners.

Closing is subject to customary conditions, including regulatory approvals.

CoAdvantage is a Tampa, Fla.-based professional employer organization and a provider of strategic human resource solutions.

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