Associated Materials launches $550M term loan; commitments due March 8

Associated Materials LLC has launched a $550 million term loan B to finance the acquisition of the company by Strategic Value Partners LLC, according to sources. Commitments are due by noon ET on March 8.

Price talk for the seven-year term loan is a spread of 575-600 basis points over the secured overnight financing rate, with a 0.5% floor and an issue price of 98.5. At talk, the yield to maturity is 6.69%-6.96%. Lenders are offered six months of 101 soft call protection.

RBC Capital is left lead arranger on the deal and Credit Suisse is co-lead arranger. The arranger group also includes UBS, KKR Capital Markets, Macquarie, BMO Capital Markets and PNC Capital Markets.

Corporate and facility ratings are B/B2, with a 3 recovery rating on the loan from S&P Global Ratings. New AMI I LLC is the borrower.

Strategic Value Partners is acquiring the business for an aggregate purchase price of $950 million. The equity contribution will be $430 million, rating agencies note. Additional financing includes a $150 million asset-based revolver due 2027 that is subject to a springing fixed-charge coverage covenant.

Associated Materials manufactures and distributes exterior building products in the U.S. and Canada.

* Article amended at 1:26 p.m. ET on Feb. 22, 2022, to update the arranger group.