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Zaxby’s shifts funds between first- and second-lien term loans
By Sara Rosenberg
New York, Dec. 8 – Zaxby’s Operating Co. LP upsized its seven-year covenant-lite first-lien term loan B to $650 million from $625 million and downsized its eight-year covenant-lite second-lien term loan to $225 million from $250 million, according to a market source.
Also, pricing on the first-lien 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 second-lien term loan was lowered to Libor plus 650 bps from Libor plus 750 bps, the source said.
In addition, the original issue discount on the first-lien term loan was changed to 99.5 from 99 and the discount on the second-lien term loan was tightened to 99.5 from 98.5.
The first-lien term loan still has a 25 bps step-down upon consummation of an initial public offering, a 0.75% Libor floor and 101 soft call protection for six months, and the second-lien term loan still has a 0.75% Libor floor and hard call protection of 102 in year one and 101 in year two, or 101 in year one and par thereafter for any prepayment or refinancing in connection with a whole-business securitization.
The company’s $975 million of senior secured credit facilities also include a $100 million five-year revolver.
Morgan Stanley Senior Funding Inc., Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC, KeyBanc Capital Markets and Fifth Third are the joint lead arrangers and bookrunners on the deal. Morgan Stanley is the administrative agent.
Commitments were scheduled to be due at 5 p.m. ET on Tuesday, the source added.
Allocations are expected on Wednesday.
Proceeds will be used to help fund Goldman Sachs Merchant Banking Division’s acquisition of a significant stake in the company.
Closing is expected by year-end.
Zaxby’s is an Athens, Ga.-based casual restaurant chain.
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