Vaco Holdings launches $600M term loan; commitments due Jan. 20

Vaco Holdings LLC has launched a $600 million first-lien term loan to refinance debt and fund a shareholder distribution, according to sources. Commitments are due by noon ET on Jan. 20.

The seven-year TLB is talked at a spread in the range of 525-550 basis points over Sofr, plus a credit spread adjustment, or CSA, with a 0.75% floor and an issue price of 99. The CSA is 10 basis points for the one-month rate; 15 basis points for the three-month rate; and 25 basis points for the six-month rate. Lenders are offered six months of 101 soft call protection.

At talk, the yield to maturity is about 6.33%-6.59%.

Jefferies, Antares and KKR Capital Markets are joint bookrunners on the deal.

Corporate and facility ratings are B/B2, with a 3 recovery rating on the loan from S&P Global Ratings. Outlooks are stable from both agencies.

Proceeds from the deal, combined with cash from the balance sheet, will be used to repay about $200 million of existing debt, to fund a $380 million shareholder dividend, to purchase $50 million of minority interests, and to pay related fees and expenses, according to Moody's. Additional financing includes a $40 million, five-year revolver with a springing first-lien net leverage covenant.

Vaco, backed by Olympus Partners, is a provider of executive search, consulting, permanent placement, and strategic staffing services.