Fairbanks Morse to launch $334.5 million of term loans on Thursday

By Sara Rosenberg

New York, Jan. 24 – Fairbanks Morse Defense (Arcline FM Holdings LLC) is scheduled to hold a lender call at 4 p.m. ET on Thursday to launch a fungible $125 million incremental first-lien term loan due June 23, 2028 and a roughly $209.5 million repriced November 2023 incremental first-lien term loan due June 23, 2028, according to a market source.

Jefferies LLC is the arranger on the deal.

Price talk on the term loan debt is SOFR+CSA plus 475 basis points with a 0.75% floor, an original issue discount of 99.25 to 99.5 on the incremental and a discount of 99.75 to par on the repriced loan, the source said.

CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

The term loan debt is getting 101 soft call protection for six months.

Commitments are due at noon ET on Feb. 1, the source added.

Proceeds from the incremental loan will be used to prepay a portion of the company’s existing second-lien term loan, and the repricing will take the November 2023 loan down from SOFR+ARRC CSA plus 525 bps with a 0.75% floor and make the debt fungible with the company’s existing first-lien term loan.

Pro forma for the transaction, the first-lien term loan will total about $1.297 billion.

Fairbanks Morse is a Beloit, Wis.-based provider of mission-critical propulsion and power generation systems, material handling devices, valves, actuators, motors and other hi-rel electrical components for the U.S. Navy and U.S. Coast Guard.

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