In brief financial markets

Select Service Partners’ £930m loan has been flexed down following a strong market response that resulted in a heavy oversubscription. MLAs are Dresdner Bank, Mizuho Corporate Bank and Morgan Stanley. The loan supports EQT’s LBO of SSP’s contract cleaning elements.The B and C tranches have been reduced by an eighth, while the second lien has been flexed down by a quarter point. Post-flex, the loan comprises a £90m seven-year term loan A at 200bp over Libor, a £255m eight-year term loan B at 237.5bp, a £255m nine-year term loan C at 287.5bp, a £150m seven-year revolver at 212.5bp, a £80m 9-1/2-year second lien tranche paying 450bp and a £100m 10-year mezzanine facility paying 9.25%. Leverage is 6.7x total net debt to Ebitda.

  • MW Brands (formerly Heinz European Seafoods) has reverse-flexed the pricing on the B and C tranches by 25bp, and by 25bp off the cash pay and PIK margins on the mezzanine, of its oversubscribed €315m debt package backing its Lehman Brothers and management-led buyout, through bookrunner Rabobank. The flex was approved and the deal signed on July 20. Post-flex, the senior debt comprises a €82.9m seven-year term loan A paying 225bp, a €61.1 eight-year B loan at 250bp, a €62.1 nine-year C loan at 300bp, a €15m seven-year capex facility at 225bp and a €50m seven-year revolver at 225bp. Margins on the A loan, the capex facility and the revolver are all subject to a ratchet. The €42.9m 10-year bullet mezzanine facility pays 4.75% cash and 4.75% PIK. Leverage is 4.29x senior net debt to Ebitda and 5.18x total net debt to Ebitda. Kaupthing Bank joined as an MLA and underwriter of senior debt and Banca Intesa joined as a JLA and underwriter. Lead managers are Bank of Ireland, BayernLB, GE Commercial Finance, Glitnir, Landsbanki, Natexis Banques Populaires, SG, Icebank. Eleven investors participated in the carve-out of Tranches B & C and three other investors joined Rabobank and North Western Mutual participated in the mezzanine tranche. MW Brands, which owns the John West and Petit Navire brands, employs about 5,000 people, with production centres in Ghana and the Seychelles, and has annual sales in excess of €400m.
  • UK cereal maker Weetabix is out with an amendment to its £617.6m recapitalisation loan of earlier this year, through MLA JPMorgan. Lion Capital is the sponsor.The amendment will take out the deal’s mezzanine debt by adding £65.75m to the B tranche and £15.75m to the C tranche, and will add a £100m PIK loan to pay the sponsor a dividend. An investor presentation will be held on Monday. Senior debt on the previous facility was split into a £110m seven-year term loan A at 212.5bp over Libor, a £134.25m eight-year term loan B at 250bp, a £134.25m nine-year term loan C at 300bp and a £64.1m seven-year revolver at 300bp. Subordinated debt comprised a £80m 9-1/2-year second lien tranche and a £95m 10-year mezzanine tranche. Pricing on these tranches will be set through a bookbuilding process.