Weber launches $250M incremental term loan; commitments due Feb. 25

Weber Inc. has launched a $250 million non-fungible incremental term loan B due October 2027 through a BofA Securities-led arranger group, according to sources. Commitments to the deal are due by noon ET on Feb. 25.

Price talk is a spread of 375 basis points over the secured overnight financing rate, plus a credit spread adjustment, with a 0.75% floor and an issue price in the range of 98-98.5. The CSA is 10 bps for the one-month rate, 15 bps for the three-month rate and 25 bps for the six-month rate. Lenders are offered six months of 101 soft call protection.

At talk, the yield to maturity is 4.91%-5.02%.

BofA Securities is leading the deal, and joint lead arrangers will include BMO Capital Markets, Capital One, J.P. Morgan, Wells Fargo and Fifth Third.

S&P Global Ratings on Feb. 18 lowered Weber's issuer credit rating to B+ from BB- and revised the outlook to developing from stable. The secured debt rating was downgraded to B+ from BB and the recovery rating was revised to 3 from 2; the new term loan was assigned these ratings.

Moody's affirmed the corporate and senior secured ratings at B1 but revised the outlook to negative from stable.

Proceeds from the deal will be used to repay revolver borrowings and add cash to the balance sheet, the rating agencies note.

Weber's existing covenant-lite TLB is priced at L+325 with a 0.75% Libor floor. As of Dec. 31, 2021, there was roughly $1.02 billion outstanding. It was originally placed in October 2020 along with a $300 million revolver due October 2025 that had $161 million outstanding at year-end. The revolver is subject to a springing net first-lien leverage covenant. Weber-Stephen Products LLC is the borrower.

Weber makes outdoor grills and accessories.