Dematic’s $540 Million Covenant-Lite LBO Loan Rises in Trading

Dematic SA’s $540 million covenant- lite term loan backing AEA Investors LP and Ontario Teachers’ Pension Plan buyout of the company rose in initial trading, according to Markit Group Ltd.

The loan began trading this morning at 100.25 cents on the dollar, Markit prices show. That’s up from an issue price of 99 cents, according to data compiled by Bloomberg.

The seven-year debt pays interest at 4 percentage points more than the London interbank offered rate, with a 1.25 percent minimum on the benchmark, Bloomberg data show.

Lenders are receiving one-year soft-call protection of 101 cents, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first year, the data show.

Credit Suisse Group AG, JPMorgan Chase & Co. and Barclays Plc arranged the financing for the Luxembourg-based supplier of automated warehouses and handling systems for Amazon.com Inc. and Wal-Mart Stores Inc., Bloomberg data show.

Covenant-lite debt doesn’t carry typical lender protection such as financial-maintenance requirements.

To contact the reporter on this story: Michael Amato in New York at mamato3@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

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