8 Feb, 2022

TKC Holdings completes upsized $320M pay-in-kind-toggle term loan; terms

TKC Holdings Inc. has completed a $320 million holdco pay-in-kind-toggle term loan through sole lead arranger Jefferies, according to sources. The five-year fixed-rate term loan has a 12% cash-pay coupon, or 13% if paying in-kind in year one and 13.5% PIK thereafter. The loan priced at the wide end of talk at an issue price of 98. Proceeds from the deal, which was upsized by $15 million, will be used to fund a shareholder dividend. TKC Holdings, backed by H.I.G. Capital, provides outsourced food and commissary services to correctional facilities.

Terms:

Borrower TKC Midco I LLC
Issue $320 million PIK toggle term loan
UoP Dividend recapitalization
Coupon 12.00% cash (13% if PIK in year one, 13.50% if PIK thereafter)
Price 98
Tenor 5-year
Call protection NC1; 108, 106, 104 calls
Corporate ratings B-/B3
Facility ratings NR/NR
Recovery ratings NR
Financial covenants None
Arrangers Jeff
Admin agent Jeff
Px Talk 12% @ 98-99 (PIK: 13%, 13.5%)
Sponsor H.I.G. Capital
Notes Upsized by $15 million