Snap One flexes $465 million term loan B to Libor plus 450 bps

By Sara Rosenberg

New York, Nov. 23 – Snap One Holdings Corp. increased pricing on its $465 million seven-year senior secured covenant-lite first-lien term loan B (B) to Libor plus 450 basis points from Libor plus 400 bps, according to a market source.

Furthermore, the original issue discount on the term loan firmed at 99, the wide end of the 99 to 99.5 talk, the source said.

Also, the incremental inside maturity exclusion amount was reduced to 50% EBITDA/$55 million from 200% of EBITDA/$222 million, and MFN was revised to 50 bps with a 24-month sunset from 75 bps with a six-month sunset and MFN will apply to incremental equivalent debt and ratio debt in form of term loans.

Indebtedness was modified to reduce the contribution debt basket to 100% of contributed EBITDA from 200% of EBITDA, add a cap on ratio debt for non-loan parties at 50% of EBITDA and remove a 200% available PR capacity basket, the source continued.

Restricted payments saw the addition of a bankruptcy and payment of default blocker to the general restricted payment basket, the “no worse” prong for unlimited restricted payments was removed and the unlimited restricted payment ratio was changed to 3.5x from 3.75x.

Investments was revised to delete the 1.75x fixed charge coverage ratio test for investments and “no worse prongs” and move the unlimited investments ratio to 3.75x from 4.25x.

Asset sales was changed to delete the 1.75x fixed charge coverage ratio test for unlimited asset sales and “no worse prongs” and lower the asset sale reinvestment period to 18 months from 24 months.

In addition, the starter under available amount was reduced to 50% of EBITDA from 75% of EBITDA, and J Crew and Chewy protections were added.

The term loan still has a 0.5% Libor floor and 101 soft call protection for six months.

Morgan Stanley Senior Funding Inc., JPMorgan Chase Bank, Jefferies LLC, UBS Investment Bank, BofA Securities Inc., BMO Capital Markets, Raymond James and Truist are the joint lead arrangers and bookrunners on the deal. Morgan Stanley is the administrative agent.

Commitments were scheduled to be due at 2 p.m. ET on Tuesday, the source added.

Proceeds will be used to refinance existing debt and pay related fees and expenses.

Snap One is a Charlotte, N.C.-based provider of a suite of products, services and software to professional do-it-for-me integrators.

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