Hillman Group Said to Set Rate on $312.4 Million Term Loan Deal

Hillman Group, a hardware distributor, set the rate it will pay on a $312.4 million term loan it’s seeking to refinance debt, according to a person with knowledge of the transaction.

The deal maturing in May 2017, will pay interest at 3 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.

Leverage, or debt to earnings before interest, taxes, depreciation and amortization, will be 3.4 times on a senior secured basis and 5.4 times total, the person said. The debt is rated Ba3 by Moody’s Investors Service and B+ by Standard & Poor’s.

Barclays Plc, GE Capital Markets, the lending unit of General Electric Co., and Morgan Stanley are arranging the transaction and commitments are due Feb. 7 at 5 p.m. in New York, according to the person.

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