Alliant Techsystems Inc. (ATK:US), the world’s largest ammunition maker, set the rate on $1.86 billion of loans it’s seeking to support its purchase of Bushnell Group Holdings Inc.
A $1.01 billion term loan A due in five years will pay interest at 2 percentage points more than the London interbank offered rate, while a $250 million B slice will have a margin of 2.75 percentage points to 3 percentage points, according to a lender presentation in a regulatory filing yesterday.
A $600 million revolving line of credit due in five years will pay 2 percentage points more than Libor. The B portion, which will be offered to lenders at 99.5 cents on the dollar, will have a 0.75 percent minimum on the lending benchmark, according to a person with knowledge of the deal, who asked not to be identified because terms aren’t set.
Alliant agreed to acquire Bushnell, a maker of binoculars and riflescopes, from private-equity firm MidOcean Partners for $985 million to expand its branded shooting sports products, according to a Sept. 5 statement from Arlington, Virginia-based Alliant.
Bank of America Corp., Bank of Tokyo Mitsubishi UFJ Ltd, Royal Bank of Canada, SunTrust Robinson Humphrey Inc., US Bancorp and Wells Fargo & Co. are arranging the transaction, according to the presentation. The financing will include $300 million of senior unsecured notes.
Proceeds of the transaction will also be used to refinance about $722.5 million of Alliant debt (ATK:US) that comes due in 2015 and 2017, according to the company.
Total leverage, or debt to earnings (ATK:US), after the transaction will be 3.2 times, according to the presentation.
A term loan B is sold mainly to non-bank lenders such as collateralized loan obligations, bank loan mutual funds and hedge funds. A term loan A is sold mainly to banks. Under a revolver, money can be borrowed again once it’s repaid; in a term loan it can’t.
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