Silver Lake Said to Revise Global Blue LBO Loan Repricing Plan

Silver Lake Partners LP and Partners Group AG are said to have improved terms on a proposal to cut the interest rates paid by Global Blue, a tax-free shopping services provider they acquired last year.

The company is offering to pay lenders 101 percent of face value on the 463 million-euro ($618 million) loans if it refinances the debt within a year, according to two people, who asked not to be identified because the deal is private. It will also limit leverage at 3.5 times debt to earnings before interest, taxes, depreciation and amortization compared with a cap of 3.75 times proposed last week, the people said.

The Nyon, Switzerland-based company originally set a Feb. 15 deadline for lenders to respond to its request for better debt terms, which include a 100 basis-point cut on interest margins on the leveraged loans, a person said. It’s seeking to reduce the margin on its term loan A and revolving credit facility to 425 basis points more than benchmarks, while the term loan B margin would be cut to 475 basis points. A basis point is 0.01 percentage point.

Gemma Hart, a New York-based spokeswoman for Silver Lake, didn’t return a call and an e-mail seeking comment outside of business hours.

Lenders are beginning to resist pressure from borrowers to re-price loans to take advantage of improving credit markets after requesting lower margins on at least $3.4 billion of European leveraged loans this year. Iceland Foods Ltd., the U.K. grocery chain, improved a proposal earlier this month to cut rates on about $1.4 billion of loans, a person said.

The request to improve Global Blue’s debt terms, which is being arranged by Royal Bank of Canada, also includes a requirement for its owners to use half of any proceeds from asset sales to repay the company’s debt, said the people.

Before it's here, it's on the Bloomberg Terminal.