First Advantage is seeking a $485 million loan as part of deal to refinance debt and to fund a dividend to its private-equity owner Symphony Technology Group, according to a person with knowledge of the deal.
The employee-screening company is asking investors to commit to the first-lien loan by June 25 after privately placing $150 million of second-lien debt for the transaction, according to the person, who asked not to be identified citing lack of authorization to speak publicly on the matter. First Advantage attempted a similar deal last year, scrapping the $655 million effort in December amid turmoil in speculative-grade financing markets.
A diminished supply of new leveraged loans this year has helped shift the power back in the hands of borrowers, who have been seizing on the opportunity to refinance debt at lower rates and obtain loans funding shareholder payouts.
Jeanel Carlson, a spokeswoman for First Advantage, didn’t immediately return a phone call seeking comment.
The Atlanta-based company is offering to pay the same interest rate on the $485 million loan that it had proposed in November, according to the person. The debt’s being offered to investors at 4.75 percentage points more than the London interbank offered rate, with a 1 percent minimum on the lending benchmark.
New first-lien loans sold to investors have an average interest rate this month of 3.98 percentage points more than lending benchmarks, compared with 4.64 percentage points in November, according to Standard & Poor’s Capital IQ Leveraged Commentary & Data.
The $150 million second-lien is $20 million less than it tried to obtain last year before the financing was pulled from the market, according to the person and data compiled by Bloomberg.