Howden launches $250M add-on term loan; lender call Nov. 1

Howden is approaching the market with a $250 million add-on term loan B for acquisition financing, according to sources. A lender call is scheduled for 11 a.m. ET on Nov. 1, and commitments to the J.P. Morgan-led deal are due by 5 p.m. ET on Nov. 4.

The add-on is offered at an original issue discount of 99.125-99.375 and will be fungible with the existing $957 million covenant-lite TLB due September 2026 that is priced at L+400, with a 0% Libor floor. At talk, the yield to maturity is 4.34%-4.40%. Note that there is a ticking that kicks in after 45 days at 50% of the margin, stepping to 100% of the margin after 90 days.

Proceeds will be used to finance the acquisition of Compressor Products International from EnPro Industries, which was announced Oct. 12, and to add cash to the balance sheet. Houston-based Compressor Products International is a provider of aftermarket components and services to the global reciprocating compressor market.

Howden's existing TLB was originally placed in 2019, along with a $300 million issue of senior unsecured notes due 2027, to finance the acquisition of the business by KPS Capital Partners. It was repriced to current levels earlier in 2021. Granite US Holdings Corp. is the borrower.

U.K.-based Howden is a global provider of air and gas handling products and services to the industrial power, oil, gas and mining industries. Current corporate ratings are B/B2, with stable outlooks.