Fender Musical Instruments shops $375M term loan; commits due Nov. 15

Fender Musical Instruments Corporation. is currently in market with a $375 million first-lien term loan that will be used to finance the company's acquisition of PreSonus Audio Electronics and to refinance debt, according to sources. Commitments are due by 5 p.m. ET on Nov. 15.

The seven-year term loan is offered at a margin of 425-450 basis points over the secured overnight financing rate plus a credit spread adjustment, or CSA, with a 0.50% floor. The CSA is 10 bps for a one-month rate, 15 bps for a three-month rate and 25 bps for a six-month rate. The term loan is offered at an original issue discount of 99 and lenders are offered six months of 101 soft call protection.

J.P. Morgan is lead arranger on the transaction.

S&P Global Ratings has assigned a facility rating of B+, with a 2 recovery rating, while the corporate rating is B, with a stable outlook. The issuer is currently rated B1, with a stable outlook by Moody's. Financing will also include a $100 million asset-based revolving credit facility due 2026 that is expected to be undrawn at close, according to a Ratings report.

The issuer currently has a first-lien term loan due December 2025 (L+500, 0% Libor floor) that has $200 million outstanding.

Fender Musical Instruments, backed by Servco Pacific Capital, manufactures, distributes and markets various musical instruments.