Safe Fleet launches $595M term loan for refinancing; commitments due Feb. 17

Safe Fleet has launched a $595 million first-lien term loan to refinance existing debt and to fund an acquisition, according to sources. Commitments are due Feb. 17.

Price talk for the seven-year term loan is a spread of 375-400 basis points over the secured overnight financing rate plus a credit spread adjustment, or CSA, with a 0.5% floor and an original issue discount of 99.5. The CSA is 10 bps for the one-month rate, 15 bps for the three-month rate and 25 bps for the six-month rate. Lenders are offered six months of 101 soft call protection.

At talk, the yield to maturity is 4.41%-4.67%.

Goldman Sachs, UBS and MUFG are joint lead arrangers on the deal.

Facility ratings are B-/B2, with a 3 recovery rating from S&P Global Ratings. Corporate ratings are B-/B3, with stable outlooks,

Proceeds from the deal will be used to repay the company's existing first-lien term loans, which totaled $563 million at the end of 2021, according to Ratings. The refinancing emerges after Safe Fleet and Madison Industries mutually agreed to terminate the proposed sale of the company to Madison, Moody's noted in its Feb. 9 report.

The issuer's existing debt includes a covenant-lite first-lien term loan due February 2025 dating to the 2018 buyout of the company by Oak Hill Capital Partners. Pricing was L+300, with a 1% Libor floor and a leverage-based step-down to L+275. A small incremental term loan that followed that same year came at essentially identical terms but with pricing of L+375, with a 1% floor. The buyout financing also included a second-lien term loan due February 2026 (L+675, 1% floor).

Safe Fleet is a designer, manufacturer, assembler, integrator and marketer of safety and productivity products for fleet vehicles and first responders.