Truck Hero launches $1.55B term loan for buyout; commitments due Jan. 20

A Jefferies-led arranger group has launched the $1.55 billion term loan B for Truck Hero Inc. that backs the buyout of the company by L Catterton, according to sources. Commitments are due by 3 p.m. ET on Jan. 20.

Price talk for the seven-year covenant-lite TLB is L+400-425 with a 0.75% Libor floor, offered at an issue price of 99. Note that there are two leverage-based step-downs of 25 basis points and another 25 bps step-down upon consummation of an IPO. At talk, the yield to maturity is roughly 5.02%-5.28%. Lenders are offered six months of 101 soft call protection.

Additional arrangers are BofA Securities, Credit Suisse, KKR Capital Markets and Stifel.

Proceeds from the TLB, along with $550 million of senior unsecured debt, will be used to finance the acquisition of a controlling interest in Truck Hero by an L Catterton-led consortium. The consortium includes a wholly owned subsidiary of the Abu Dhabi Investment Authority, Mubadala Investment Co. and StepStone Group. Existing sponsor CCMP Capital, among other shareholders, and the company's founding CEO, Bill Reminder, will remain investors.

Additional financing includes a $200 million, five-year ABL revolver.

Thus far, Moody's assigned a B3 corporate rating, B2 secured first-lien rating and a Caa2 unsecured rating.

Truck Hero manufactures and markets branded functional accessories for trucks and Jeeps.