Aecom launches roughly $1.26 billion term loan B at Libor plus 325 bps

By Sara Rosenberg

New York, Sept. 4 – Aecom Technology Corp. launched on Thursday its $1,262,500,000 seven-year covenant-light term loan B with price talk of Libor plus 325 basis points with a 0.75% Libor floor and an original issue discount of 99˝, according to a market source.

The term loan B has 101 soft call protection for six months, the source said.

Commitments are due on Sept. 16.

Bank of America Merrill Lynch, MUFG, Union Bank, Scotia Bank, BNP Paribas Securities Corp., J.P. Morgan Securities LLC, BBVA Compass, Wells Fargo Bank, Sumitomo Mitsui Banking Corp., Credit Agricole CIB, Morgan Stanley Senior Funding Inc. and HSBC Securities (USA) Inc. are the lead banks on the deal (Ba1/BB+).

Proceeds from the new debt will be used to help fund the cash consideration of the acquisition of URS Corp. and to refinance some existing debt at Aecom and URS.

The company also expects to get a $1.85 billion term loan A, a $1.05 billion revolver, a $500 million incremental performance letter-of-credit facility, $800 million in eight-year senior unsecured notes and $800 million in 10-year senior unsecured notes.

Under the agreement, URS stockholders will receive per share consideration equal to $33.00 in cash and 0.734 of a share of Aecom common stock. URS stockholders may elect to receive all cash or all stock consideration, and the election will be subject to a customary proration mechanism to achieve an aggregate consideration mix of about 59% cash and 41% Aecom common shares.

The acquisition is valued at about $6 billion, including the assumption of URS debt.

URS stockholders will own shares that account for about 35% of the combined company.

Closing is expected in October, subject to approvals from both companies’ stockholders, regulatory approvals and customary conditions. The transaction is not conditioned on financing.

Aecom is a Los Angeles-based engineering design firm. URS is a San Francisco-based provider of engineering, construction and technical services.

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