Bombardier Recreational Products Inc., the maker of jet skis and outboard motors that’s owned by Bain Capital LLC, is seeking a $1.05 billion term loan to fund a dividend and refinance debt, according to a person with knowledge of the transaction.
The debt will pay interest at 4 percentage points more than the London interbank offered rate, said the person, who asked not to be identified because the information is private. Libor, a rate banks say they can borrow in dollars from each other, will have a 1.25 percent floor.
Bombardier Recreational is proposing to sell the loan at 99 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.
Royal Bank of Canada, Bank of Montreal, UBS AG and Bank of America Corp. are arranging the financing for Valcourt, Québec-based company and commitments are due Jan. 23, the person said.
The company canceled plans for the dividend loan last year citing market conditions and instead opted for a $125 million add-on term loan to its existing credit facility, according to data compiled by Bloomberg.
Valerie Bridger, a spokeswoman for Bombardier Recreational, didn’t immediately respond to an e-mail seeking comment.