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NEW YORK, June 11 (Reuters) - Goldman Sachs is launching at 10 a.m. Wednesday a $730 million loan backing Savers Inc's leveraged buyout by a group of private equity firms, sources told Thomson Reuters LPC.
The deal includes a $75 million, five-year revolver and a $655 million, seven-year covenant-lite term loan. Commitments to the loan will be due June 27, with closing and funding slated for July 9.
Leonard Green & Partners, TPG and Savers management are buying the company from Freeman Spogli & Co for an enterprise value of $1.72 billion. The buyers will contribute $764 million in equity, split between $348 million from the sponsors, $348 million from Thomas Ellison, Savers' current chairman, and $69 million from management.
The issuer also will raise $295 million in 10-year private unsecured notes via Crescent Capital Group. The coupon on the notes is expected to be 10.25 percent, sources said.
Pro forma for the transaction the company will have secured debt to adjusted Ebitda of 4.3 times, total debt to adjusted Ebitda of 6.2 times, and adjusted Ebitda to interest of 2.4 times, assuming the last 12 months ending March 31, adjusted Ebitda of $155 million.
Barclays, Credit Suisse and Deutsche Bank are to the right of Goldman Sachs on the loan financing. The LBO transaction is expected to be completed in July.
In March 2011, Savers entered into a new $460 million term loan, according to Thomson Reuters LPC data. During syndication, pricing on that loan was cut by 25bp to 300bp over Libor, and the Libor floor was cut to 1.25 percent from 1.5 percent. At that time, the discount of 99.5 cents on the dollar was done away with and the loan was issued at par. Pricing on that term loan is to step down to 275bp over Libor when leverage is less than 2.75 times. JP Morgan led that loan.
Savers is a thrift store chain in North America.