Thu 09/10/2020 18:41 PM
Tensar Corp., an Atlanta-based building products manufacturer, and its sponsor Castle Harlan are working with Morgan Stanley as the manufacturer attempts to either sell itself or refinance its debt ahead of a July 2021 maturity on its $235 million first lien term loan, according to sources. The move comes after the company failed to complete an amend and extend of the term loan over the summer, the sources said.

Tensar also has a $78 million second lien term loan due July 2022 and a $25 million ABL revolver due in 2023, according to sources. The ABL carries a 90-day springing maturity ahead of the first lien term loan, they said.

The first lien term loan was quoted today at 95.5 at the midpoint, up from the mid-80s in late April, while the second lien was quoted today at 81.5 at the midpoint, up from the high 60s in late April, according to a trading desk.

Castle Harlan initially sought to sell Tensar at the beginning of 2020, but the onset of the Covid-19 pandemic caused the sale process to fall through, the sources said.

The company’s performance has improved over the past several quarters as its end markets have been largely protected during the pandemic, but uncertainty remains concerning infrastructure spending and state budgets for 2021 given lower fuel tax collections in many states, according to an Aug. 24 Standard & Poor’s report. Furthermore, renewed coronavirus outbreaks could increase uncertainty in capital markets and potentially hinder the company’s ability to refinance its debt, the report said.

Castle Harlan acquired Tensar in July 2014 for $400 million. Founded in 2005, Tensar manufactures and supplies products and services, such as pavement reinforcement, for the infrastructure, transportation and construction markets worldwide. Tensar has manufacturing facilities in Morrow, Ga.; Poseyville, Ind.; Centre, Ala.; Shadsworth, England; Wuhan, China; and St. Petersburg, Russia, according to Castle Harlan’s website.

Morgan Stanley declined to comment. Castle Harlan and Tensar did not immediately respond to a request for comment.

--Millie Dent, Alexander Saeedy
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