Apex Tool Said to Change Deadline on $1.01 Billion of LBO LoansMichael Amato
Apex Tool Group LLC changed the commitment deadline on $1.01 billion of loans backing its buyout by Bain Capital Partners LLC, according to a person with knowledge of the transaction.
Barclays Plc, Goldman Sachs Group Inc., Morgan Stanley, Royal Bank of Canada, Citigroup Inc. and Deutsche Bank AG are arranging the financing and investors have until 5 p.m. on Jan. 23 in New York to let the banks know if they will participate in the deal, said the person, who asked not to be identified because the information is private. The company was originally seeking responses by Jan. 25, according to data compiled by Bloomberg.
The seven-year debt will pay interest at 4 percentage points to 4.25 percentage points more than the London interbank offered rate, Bloomberg data show. Libor, a rate banks say they can borrow in dollars from each other, will have a 1.25 percent floor.
Apex Tool is proposing to sell the loan at 99 cents on the dollar, the data show, reducing proceeds for the company and boosting the yield to investors.
Lenders are being offered 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 term loan will be covenant-lite, meaning that it will not carry typical lender protection such as financial-maintenance requirements, said the person.
Leverage, or debt to earnings before interest, taxes, depreciation and amortization, will be 3.6 times on a senior secured basis and 5.4 times total, the data show. The debt is rated B1 by Moody’s Investors Service and B by Standard & Poor’s.
Bain Capital is acquiring the company from Danaher Corp. and Cooper Industries Plc for $1.6 billion and the deal expected to close in the first half of 2013, according to an Oct. 10 statement. Danaher and Cooper each own a 50 percent interest in Apex Tool.