Pretium Packaging
Pretium Packaging to Receive $325M New Money, Swap 1L Loan Into 2nd-Out Piece at 93.6%
Mon 10/02/2023 18:11 PM
Pretium Packaging and lenders agreed on a deal to provide the company with $325 million of new money in the form of a super-priority loan and give all lenders the opportunity to uptier their first lien loan into a second-out piece at about 93.6%, according to sources.
The super-priority loan pays S+500 bps, and the exchanged loan will have a rate of S+460 bps, the sources said. Both loans will mature in 2028. Lenders holding 86% of the first lien loans are backstopping the new money in exchange for a roughly 1% fee, they said. The super-priority loan has a 2.5 point OID.
The new-money piece can be PIK-ed at 50% in the first year and 25% in the second year, while the second-out piece can be PIK-ed at 30.1% in the first year and 15.25% in the second year, the source said.
Lenders have to contribute new money to participate in the debt uptiering at a mild discount as part of the deal, which is open to everyone, as reported.
The participation deadline is Oct. 13. Pretium Packaging is hosting a lender call tomorrow, Tuesday, Oct. 3, to discuss the transaction, according to sources.
Pro forma the transaction, liquidity will jump to $306 million from $32 million, comprising $219 million of cash and about $87 million from the $90 million of ABL. The pro forma total leverage would rise to 10.1x from 9.1x, but the total net leverage would tick down to 8.9x from 9.1x, the sources said.
Pretium Packaging and sponsor Clearlake did not immediately respond to requests for comment.
--Geoff Burrows, Gaurav Sharma, Harvard Zhang
The super-priority loan pays S+500 bps, and the exchanged loan will have a rate of S+460 bps, the sources said. Both loans will mature in 2028. Lenders holding 86% of the first lien loans are backstopping the new money in exchange for a roughly 1% fee, they said. The super-priority loan has a 2.5 point OID.
The new-money piece can be PIK-ed at 50% in the first year and 25% in the second year, while the second-out piece can be PIK-ed at 30.1% in the first year and 15.25% in the second year, the source said.
Lenders have to contribute new money to participate in the debt uptiering at a mild discount as part of the deal, which is open to everyone, as reported.
The participation deadline is Oct. 13. Pretium Packaging is hosting a lender call tomorrow, Tuesday, Oct. 3, to discuss the transaction, according to sources.
Pro forma the transaction, liquidity will jump to $306 million from $32 million, comprising $219 million of cash and about $87 million from the $90 million of ABL. The pro forma total leverage would rise to 10.1x from 9.1x, but the total net leverage would tick down to 8.9x from 9.1x, the sources said.
Pretium Packaging and sponsor Clearlake did not immediately respond to requests for comment.
--Geoff Burrows, Gaurav Sharma, Harvard Zhang
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