S&S Holdings trims add-on term loan to $125M, finalizes pricing tight to talk

A Barclays-led arranger group has finalized pricing tight to talk on the add-on first-lien term loan for S&S Holdings, which was trimmed by $25 million, to $125 million, according to sources. Recommitments to the deal are due by noon ET on Nov. 16.

The add-on is now offered at an original issue discount of 99.25, from 98.5 at launch, and it will be fungible with the existing covenant-lite first-lien term loan due March 2028 that is priced at L+500, with a 0.50% Libor floor. At revised talk, the yield to maturity is 5.76%. The existing 101 soft call runs through March 2022.

Barclays is leading the deal and Deutsche Bank, Credit Suisse, BMO Capital Markets, Citizens, Natixis and Truist Securities are joint lead arrangers.

Proceeds from the term loan, combined with cash, will be used to fund a tuck-in acquisition. The company has elected to use cash on hand to replace the $25 million downsize to the term loan.

S&S in March placed the existing $625 million first-lien term loan as part of the financing backing the buyout of the company by CD&R. Additional financing included a $175 million second-lien term loan due March 2029 (L+875, 0.50% floor).

S&P Global Ratings on Nov. 4 upgraded the issuer's corporate rating to B, from B-, and the first-lien issue-level rating to B, from CCC+. The 3 recovery rating on the loan is unchanged. Likewise, Moody's raised the corporate rating to B2, from B3, bringing it in-line with an existing B2 rating on the first-lien debt. The agencies cited strong operating performance and improving credit metrics for the upgrades.

The company is also upsizing its asset-based lending revolver due 2026 to $275 million, from $225 million, Ratings notes. The revolver will be undrawn at close.

S&S Activewear LLC is a distributor of blank sportswear, corporate apparel and accessories.