North American Bancard finalizes terms of $775M term loan B

A Credit Suisse-led arranger group is out with revised terms of the $775 million covenant-lite first-lien term loan for North American Bancard LLC, according to sources. Recommitments are due today at noon ET.

Pricing for the seven-year term loan will be based off Sofr, plus a credit spread adjustment, or CSA, with a floor of 0.50%. The CSA is 10 basis points for the one-month tenor, 15 basis points for the three-month tenor, and 25 basis points for the six-month tenor. The margin is set at 300 basis points, the tight end of the 300-325 basis points range offered at launch, and there is a 25 basis points step-down at 2.85x net senior secured leverage. The OID is revised to 99.75, from 99.5. Lenders will be offered six months of 101 soft call protection.

At final terms, the yield to maturity is 3.59%.

BMO Capital Markets is a joint lead arranger on the deal.

Corporate and facility ratings are B+/B1, with a 3 recovery rating on the loan from S&P Global Ratings. The borrower is NAB Holdings LLC.

Proceeds from the deal will be used to refinance existing debt and fund a distribution to shareholders. For reference, pricing on NAB's extant first-lien term loan due June 2024 is L+300, with a 1% floor, and with a leverage-based step-down to L+275. In addition to the term loan, financing for the issuer is to include a $125 million revolving credit facility due 2026.

Privately owned North American Bancard, based in Troy, Mich., provides merchant payment processing services for businesses.