Grede Holdings LLC, a supplier of metal components to transportation and industrial markets, set the price at which it’s selling a $100 million term loan to fund a dividend, according to a person with knowledge of the transaction.
The add-on debt due in 2017, will be sold at 99.5 cents on the dollar, compared with 99 cents previously offered, said the person, who asked not to be identified because the information is private. The decrease in the discount increases proceeds for the company and reduces the yield to investors.
The loan will pay interest at 5.5 percentage points more than the London interbank offered rate, with a 1.5 percent floor, according to data compiled by Bloomberg.
Proceeds from the new loan along with cash on the balance and a draw on the company’s asset-based revolving line of credit will be used to fund a $150 million dividend to Wayzata Investment Partners LLC and GSC Group Inc., according to the person.
Leverage, or debt to earnings before interest, taxes, depreciation and amortization, will be 2.1 times, the person said.
GE Capital Markets, the lending unit of General Electric Co., is arranging the deal for Southfield, Michigan-based company, the data show.