An RBC Capital Markets-led arranger group has released price talk on the $1.2 billion, seven-year non-fungible incremental term loan B for Aspen Dental Management Inc., according to sources. Commitments are due at 5 p.m. ET on Tuesday, Dec. 15.
Price talk for the seven-year covenant-lite TLB is 400-425 basis points over Libor with a 0.75% Libor floor, offered at 99. Pricing will include a leverage-based step-down to be determined. At talk, the yield to maturity is about 5.02%-5.28%.
Joint lead arrangers are J.P. Morgan, Deutsche Bank, Credit Suisse, KKR Capital Markets and BMO Capital Markets.
Corporate and first-lien facility ratings are B/B2, with a 3 recovery rating on the loan from S&P Global Ratings.
Proceeds will be used to finance the $1.135 billion acquisition of Sun Capital Partners-backed ClearChoice Management Services, a provider of practice support services to the nationwide network of ClearChoice Dental Implant Centers at more than 60 locations. The acquisition is expected to close by the end of 2020, subject to regulatory and other customary closing conditions.
Financing will also include a $250 million, five-year revolver that is expected to be undrawn at close. The RC has a springing first-lien net leverage covenant.
Aspen Dental was last in the market in February when it tacked on $50 million to its covenant-lite TLB due April 2025 to fund a shareholder distribution. At issuance, pricing was L+275, with a 0% floor, and with a 25-basis-point margin step-up triggered when first-lien net leverage is 4.75x or higher. The add-on brought the tranche size at the time to $907 million. RBC Capital Markets is administrative agent.
Aspen Dental, backed by Ares Management and Leonard Green & Partners, provides dental practice management and laboratory services.