Modulaire Group wraps €250M term loan add-on; terms

Modulaire Group priced the €250 million add-on to its E+450 term loan due December 2028 at the tighter end of initial offer price talk at 97.5. BofA Securities and Goldman Sachs were joint physical bookrunners, and Morgan Stanley was a joint bookrunner. The deal was presented on a call Feb. 7, and final pricing results in a 5.05% yield. Proceeds — along with roughly €124 million of cash — are earmarked to refinance a €185 million holdco payment-in-kind facility held outside the restricted group, to repay a partially drawn revolver and support signed M&A.

The deal increases a term loan allocated in October 2021 that supported Brookfield's $5 billion buyout of the U.K.-based modular leasing company. The buyout was also backed by a €750 million offering of seven-year secured notes, £250 million of sterling secured notes and €435 million of eight-year unsecured notes.

The new debt takes leverage to 4.8x/5.7x (secured/total), from 4.1x/5.1x, according to the company update.

Ratings are affirmed at B/B2/B (corporate) and B/B2/B+ (issue), with a 3 recovery rating and stable outlook on all. The loan comes with an annual environmental, social and governance margin ratchet of +/- 7.5 basis points. Morgan Stanley is also a joint bookrunner on the deal.

London-based Modulaire Group designs, manufactures, leases, maintains and sells prefabricated modular space, secure portable storage and remote workforce accommodation management products, including portable cabins, modular buildings, secure storage, portable toilets, temporary kitchens and temporary fencing.

Terms: