Authentic Brands to launch $1.675B 1st-lien, $500M 2nd-lien term loans

Authentic Brands Group Inc. is coming to market with a $1.675 billion incremental first-lien term loan and a $500 million second-lien term loan, according to sources. The deal will launch with a lender call at 12:30 p.m. ET on Dec. 1.

The incremental first-lien term loan will have a seven-year maturity and will come with six months of 101 soft call protection, and the eight-year second-lien term loan will include hard calls at 102 and 101 in years one and two, respectively. ABG Intermediate Holdings 2 LLC is the borrower.

BofA Securities, Goldman Sachs, KeyBanc Capital Markets, Jefferies and UBS are joint lead arrangers on the first-lien tranche. BofA Securities is sole lead arranger on the second-lien.

Proceeds from the deal will be used to finance the acquisition of Reebok and to support the recapitalization associated with a minority stake sale. Authentic Brands announced in August that it was acquiring Reebok from adidas in a deal expected to close in the first quarter of 2022. The purchase price is €2.1 billion, according to adidas, the majority of which is to be paid at closing and the remainder comprised of deferred and contingent consideration.

On Nov. 22, Authentic Brands disclosed that funds advised by CVC Capital Partners and HPS Investment Partners agreed to acquire significant equity stakes in the company. BlackRock Long Term Private Capital will remain the company's largest shareholder. Simon, General Atlantic, Leonard Green & Partners, GIC, Brookfield, Lion Capital, Jasper Ridge Partners and Shaquille O’Neal also hold equity stakes in the company.

ABG was last in the loan market in February when it completed a repricing of its covenant-lite term loan B due September 2024 that lowered pricing to L+325 with a 0.75% Libor floor. The totaled $1.597 billion at the time.

Authentic Brands Group is a brand development, marketing and entertainment company. Current corporate ratings are B/B2.