Bloomberg News

Compass Diversified Said to Increase Rate on $225 Million Loan

October 21, 2011

Oct. 21 (Bloomberg) -- Compass Group Diversified Holdings LLC, an owner of manufacturing and staffing companies, increased the interest rate it will pay on $225 million of loans it’s seeking to refinance debt and fund future acquisitions, according to a person with knowledge of the transaction.

A $225 million last-out term loan B maturing in six years will now pay 6 percentage points more than the London interbank offered rate compared with 5.25 percentage points to 5.5 percentage points initially offered, said the person, who declined to be identified because terms are private. A Libor floor will remain unchanged at 1.5 percent. In a liquidation lenders in first-out debt are repaid before last-out creditors.

The company is proposing to sell the loan at 96 cents on dollar, compared with 97 cents to 98 cents initially proposed, reducing proceeds for the company and boosting the yield to investors.

A five year first-out revolving line of credit was increased to $290 million from $275 million, said the person, who declined to be identified because the terms are private.

Toronto-Dominion Bank, which is arranging the deal for the Westport, Connecticut-based company is expected to distributed the debt to investors early next week, the person said.

Alan Offenberg, chief executive officer of Compass, didn’t respond to an e-mail seeking comment.

A term loan B is mainly bought by non-bank lenders such as collateralized loan obligations, bank-loan mutual funds and hedge funds.

--Editors: Faris Khan, John Parry

To contact the reporter on this story: Michael Amato in New York at mamato3@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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