Weber returns to market with $250M incremental term loan

Weber Inc. is returning to market with a $250 million non-fungible incremental term loan B that will be used to support ongoing working capital needs and growth in the business, according to sources.

The incremental will share the same October 2027 maturity as the existing term loan and will be issued with six months of 101 soft call protection. Weber-Stephens Products LLC is the borrower.

BofA Securities is leading the deal, and joint lead arrangers will include BMO Capital Markets, Capital One, J.P. Morgan, Wells Fargo and Fifth Third.

S&P Global Ratings today lowered Weber's issuer credit rating to B+ from BB- and revised the outlook to developing from stable. The secured debt rating was dropped to B+ from BB and the recovery rating was revised to 3 from 2; the new term loan was assigned these ratings.

"The downgrade reflects Weber's elevated leverage primarily due to ongoing supply chain challenges, high input-cost inflation, and elevated working capital borrowings," the rating agency said.

Weber's existing covenant-lite TLB is priced at L+325 with a 0.75% Libor floor. As of Dec. 31, 2021, there was roughly $1.02 billion outstanding. It was originally placed in October 2020 along with a $300 million revolver due October 2025 that had $161 million outstanding at year-end. The revolver is subject to a springing net first-lien leverage covenant.

Weber-Stephen Products is a maker of outdoor grills and accessories.