Metaldyne LLC, a manufacturer of metal components for powertrain applications, plans to lower the rate it will pay on a $415 million term loan B, according to a person with knowledge of the transaction.
The debt maturing in December 2018 will pay interest at 3.75 percentage points more than the London interbank offered rate and the loan will be sold at par, 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.
Lenders are being offered six months of 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 six months.
Bank of America Corp., Deutsche Bank AG, Royal Bank of Canada and Barclays Plc are arranging the transaction and commitments are due Feb. 21 by 5 p.m. in New York, according to the person.
The company’s existing term loan pays interest at 4.75 percentage points more than Libor, with a 1.25 percent floor, according to data compiled by Bloomberg. The debt was sold to investors at 99.5 cents on the dollar and was quoted at 101.75 cents today, the data show.