Aecom Technology shifts funds between term loan A and term loan B

By Sara Rosenberg

New York, Sept. 17 – Aecom Technology Corp. reduced its seven-year covenant-light term loan B size to $1,187,500,000 from $1,262,500,000 and increased its term loan A size to $1,925,000,000 from $1.85 billion, according to a market source.

The term loan B is priced at Libor plus 300 basis points with a 0.75% Libor floor and an original issue discount of 99˝, and includes 101 soft call protection for one year.

Earlier in syndication, pricing on the B loan was lowered from Libor plus 325 bps, the call protection was extended from six months and the 18-month MFN sunset was eliminated.

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 $4,662,500,000 credit facility (Ba1/BB+) that also includes a $1.05 billion revolver and a $500 million incremental performance letter-of-credit facility.

Proceeds from the new bank debt and $1.6 billion of senior notes will be used to fund the cash consideration of the acquisition of URS Corp. and to refinance some existing debt at Aecom and URS.

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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