Culligan flexes $2.25 billion of term loans to Libor plus 400 bps

By Sara Rosenberg

New York, June 7 – Culligan (Osmosis Debt Merger Sub Inc.) trimmed pricing on its $2 billion seven-year covenant-lite first-lien term loan B and $250 million delayed-draw covenant-lite term loan to Libor plus 400 basis points from talk in the range of Libor plus 425 bps to 450 bps, according to a market source.

Furthermore, the original issue discount on the term loan debt was set at 99.5, the tight end of the 99 to 99.5 talk, and the company will now host quarterly lender calls, the source said.

The term loan debt still has 25 bps step-downs at 0.5x and 1x inside closing first-lien net leverage, a 0.5% Libor floor and 101 soft call protection for six months.

Delayed-draw term loan ticking fees are half the margin from days 46 to 90 and the full margin thereafter.

The company’s $2.475 billion of senior secured credit facilities also include a $225 million five-year revolver.

Morgan Stanley Senior Funding Inc. and Citigroup Global Markets Inc. are the joint lead arrangers and bookrunners on the deal.

Commitments continued to be due at 5 p.m. ET on Wednesday, the source added.

Allocations are expected on Thursday.

Proceeds will be used to fund the acquisition of a majority interest in the company by BDT Capital Partners LLC from Advent International and Centerbridge Partners LP. Advent will reinvest to acquire a minority stake in the business.

Culligan is a Rosemont, Ill.-based provider of water treatment products and services.

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