North American Bancard sets price talk for $775M 1st-lien term loan

North American Bancard LLC has launched a $775 million covenant-lite first-lien term loan as part of a dividend recapitalization, according to sources. A lender call is being held today at 11 a.m. ET and commitments to the Credit Suisse-led deal are due by 5 p.m. ET on Nov. 17.

Pricing for the seven-year term loan will be based off Sofr, plus a credit spread adjustment, or CSA, with a floor of 0.50%. The CSA is 10 basis points for the 1-month tenor, 15 bps for the 3-month tenor, and 25 bps for the 6-month tenor. The margin is guided in a range of 300-325 bps, and the OID is 99.5. Lenders will be offered six months of 101 soft call protection.

BMO Capital Markets is a joint lead arranger on the deal.

Proceeds from the deal will be used to refinance existing debt and fund a distribution to shareholders. NAB has a covenant-lite first-lien term loan due June 2024 that totaled $638 million when it was repriced in December 2017. Following that transaction, pricing on the loan is L+300, with a 1% floor, and with a leverage-based step-down to L+275.

Investors are being guided to corporate and facility ratings of B+/B1, with a 3 recovery rating on the loan from S&P Global Ratings. The borrower is NAB Holdings LLC.

In addition to the term loan, financing for the issuer is to include a $125 million revolving credit facility.

Privately owned North American Bancard, based in Troy, Mich., provides merchant payment processing services for businesses.