RLPC: Federal-Mogul sets price talk on $2.3B refi

NEW YORK, June 11 Tue Jun 11, 2013 11:38am EDT

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NEW YORK, June 11 (Reuters) - Automotive supplier Federal-Mogul Corp has set price talk on its new $2.3 billion refinancing credit, sources told Thomson Reuters LPC.

The $1.75 billion, seven-year term loan B is guided at LIB+350-375, with a 1 percent Libor floor, and a 99.5 issue price. The term loan is expected to be covenant-lite.

The loan will carry 101 soft call protection for six months. The loan will have an accordion feature of $500 million, or up to 2.75 times net secured leverage (with up to $500 million in cash netting). The accordion will include 50bp MFN protection with a 24 month sunset provision.

The term loan will amortize at 1 percent annually.

The company also plans to enter a $550 million asset-based lending revolver. The new credit will run alongside $750 million of senior notes.

As of March 31, Federal-Mogul had $2.8 billion outstanding on its existing credit consisting of $1.86 billion outstanding on tranche B term loans due December 27, 2014, and $948 million outstanding on tranche C term loans due December 27, 2015.

The company also has a $540 million revolving credit due December 27. The revolver was undrawn as of March 31.

In May, the company said it planned a $500 million common stock rights offer. Proceeds of the offering, launched on June 7, will also be used to refinance outstanding debt.

Federal-Mogul is a global supplier to makers and servicers of automotive equipment and vehicles as well as to marine, rail, aerospace, power and industrial markets.

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