Aecom flexes roughly $1.26 billion term loan B to Libor plus 300 bps

By Sara Rosenberg

New York, Sept. 16 – Aecom Technology Corp. lowered pricing on its $1,262,500,000 seven-year covenant-light term loan B to Libor plus 300 basis points from talk of Libor plus 325 bps, according to a market source.

Also, the 101 soft call protection was extended to one year from six months, and the 18-month MFN sunset was eliminated, the source said.

As before, the term loan has a 0.75% Libor floor and an original issue discount of 99˝.

Bank of America Merrill Lynch, MUFG Union Bank, Scotia Bank, BNP Paribas Securities Corp. and J.P. Morgan Securities LLC are the joint lead arrangers on the deal (Ba1/BB+).

Recommitments are due at 10 a.m. ET on Wednesday, the source added.

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 and $1.6 billion in 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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