Coveris Holdings, a portfolio company of funds advised by Sun Capital Partners, announced that it has received the necessary consents to certain proposed amendments to Coveris’ existing senior secured term loan facility, which will permit the incurrence of an incremental term loan facility in the aggregate amount of approximately $350.0 million (equivalent).
The Incremental Term Loan will upsize the Term Loan, which currently comprises a $342.2 million U.S. dollar-denominated senior secured tranche and a €244.7 million euro-denominated tranche. The existing Term Loan and the Incremental Term Loan will have the same terms, including interest rate and maturity date.
The Incremental Term Loan will increase the U.S. dollar-denominated tranche of the Term Loan by $172.5 million, which is priced at LIBOR plus 3.50% (with a LIBOR floor of 1.00%), and will increase the Euro-denominated tranche of the Term Loan by €160.0 million, which is priced at EURIBOR plus 3.50% (subject to a EURIBOR floor of 1.00%).
In addition to permitting the incurrence of the Incremental Term Loan, the Proposed Amendments to the Term Loan include amending the negative covenants in the Term Loan to provide the Coveris Group with additional capacity for, among other things, additional indebtedness, restricted payments, dispositions, investments and acquisitions.
Coveris expects the Incremental Term Loan and the Proposed Amendments to close on August 18, 2016 (the “Closing Date”), subject to customary closing conditions.
The Coveris Group intends to use the proceeds from the Incremental Term Loan to redeem (the “Redemption”) all of Coveris Holding Corp.’s (formerly, Exopack Holding Corp.) outstanding 10.00% senior notes due 2018 on the Closing Date, to repay (the “Repayment”) a portion of the amounts outstanding under the North American and United Kingdom asset-backed revolving credit facilities to which certain members of the Coveris Group are party, and to pay any fees, premiums and expenses related to the Redemption and the Repayment.
The occurrence of the Redemption and Repayment are conditioned upon the closing of the Incremental Term Loan and the Proposed Amendments.
Goldman Sachs Bank USA, Credit Suisse International and J.P. Morgan Limited are the joint lead arrangers for the Proposed Amendments and the Incremental Term Loan.
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