Pike Corp. launches $630M term loan; commitments due Jan. 15

Sole bookrunner Morgan Stanley has launched a $630 million covenant-lite term loan B due December 2027 for Pike Corp. that supports Lindsay Goldberg's acquisition of a 50.1% stake in the company and which will also refinance the issuer's existing term loan, according to sources. Commitments are due by noon ET on Friday, Jan. 15.

Price talk is L+325-350, with a 0% Libor floor, offered at 99.50. That indicates a yield to maturity of 3.60%-3.86%. Lenders are offered six months of 101 soft call protection.

Of the total amount of the TLB, $315 million will close immediately and $315 million will close March 1.

Pike announced on Dec. 21, 2020, the acquisition of a majority interest in the company by Lindsay Goldberg supported with an equity investment and a new incremental term loan B. Eric Pike will continue as chairman and CEO, alongside the existing management team, and he and other investors will remain "significant shareholders" in the business, the company said.

Pike's existing covenant-lite TLB due July 2026 (L+300, 0% floor) totaled $336 million when it was issued in August 2020 in a refinancing transaction that included a concurrently placed $500 million issue of 5.50% senior unsecured notes due September 2028.

S&P Global Ratings today assigned a B issue-level rating and 3 recovery rating to the loan. The corporate rating is B, with a stable outlook. Existing ratings from Moody's are Ba3 on the first-lien debt with a corporate rating of B2.

Pike is a provider of construction, repair and engineering services for distribution and transmission power lines and substations, fiber, telecommunications and gas utilities.