Fairbanks Morse firms issue prices on $334.5 million of term loans

By Sara Rosenberg

New York, Feb. 1 – Fairbanks Morse Defense (Arcline FM Holdings LLC) set the original issue discount on its fungible $125 million incremental first-lien term loan due June 23, 2028 at 99.5, the tight end of the 99.25 to 99.5 talk, and the issue price on its roughly $209.5 million repriced November 2023 incremental first-lien term loan due June 23, 2028 at par, the tight end of the 99.75 to par talk, according to a market source.

Pricing on the term loan debt (B3/B) remained at SOFR+CSA plus 475 basis points with a 0.75% floor.

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 has 101 soft call protection for six months.

Jefferies LLC is the arranger on the deal.

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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