EG Group upsizes dollar 1st-lien term loan to $510M, firms pricing

EG Group Ltd. has finalized terms on the dollar-denominated portion of its cross-border term loan financing, upsizing the first-lien term loan to $510 million, from $450 million initially, and firming pricing at the tight end of talk, according to sources. Commitments and consents are due by noon ET today.

Price talk on the first-lien term loan finalized at L+425, with a 0.50% Libor floor and an original issue discount of 99, from L+425-450 at launch. Lenders are offered six months of 101 soft call protection. At final terms, yield to maturity is approximately 5.02%.

The dollar-denominated tranche comes alongside a €610 million euro-denominated second-lien term loan, which was upsized from €330 million at launch. Price talk on the euro-denominated second-lien tranche is E+700, with a 0% floor and an OID of 99, tightened from E+700-725, with an OID of 98.5 at launch. Yield to maturity is approximately 7.40% at talk. The second-lien has 102, 101 and par call protection.

Proceeds from the term loans will be used to support the refinancing in full of EG's euro and dollar second-lien term loans due April 2026.

The term loans are part of a debt raise that also includes a £675 million privately placed high-yield offering that helps support acquisitions in Germany and the U.K. In all, this will leave net senior and total leverage at the group at roughly 5.5x and 6x, respectively.

Moody's has affirmed its B3 (issuer, first-lien) and Caa2 (second-lien) ratings line up on stable outlook. S&P Global Ratings and Fitch have affirmed ratings of B-/B- (issuer), B-/B (first-lien), and CCC/CCC (second-lien), and a stable outlook.

On the first-lien loan Barclays (lead left) and J.P. Morgan are joint physical bookrunners, and joint global coordinators with Rabobank. BofA Securities, Deutsche Bank, ING, Lloyds, Morgan Stanley and SMBC are also bookrunners on this tranche. On the second-lien, Barclays is lead left and a bookrunner with BofA Securities, Deutsche Bank, HSBC, Lloyds, Morgan Stanley and Rabobank.

EG Group is one of the five largest issuers in the S&P European Leveraged Loan Index, or ELLI, based on the amount outstanding. It operates convenience store-based filling stations and was founded in 2001 as Euro Garages Ltd. by brothers Zuber and Mohsin Issa.

Proceeds from the new financing will principally support the acquisition of a network of 286 petrol station forecourts in southern Germany from OMV Deutschland for €485 million and a network of petrol stations, car washes and ancillary land from British supermarket group ASDA for £750 million.