UBS and Deutsche Bank are prepping a $375 million credit facility and $250 million of term notes for Builders FirstSource that will refinance debt and pay a $237 million dividend to JLL Partners. There has been a substantial change in the company's EBITDA from around $70 million to $125 million since last March, when the Dallas-based building materials supplier came to market (LMW, 3/15).
The old facility went through several changes during syndication. The deal closed as a $230 million, first-lien term loan at LIBOR plus 3 1/4% and an $85 million, second-lien term loan at LIBOR plus 8 1/2%. The second-lien term loan also had a 2% LIBOR floor and a 1% upfront fee.
This time the company is issuing $250 million of senior secured, second-lien floating rate notes instead of the second-lien term loan. "The floating rate note market is pretty hot and the best deal they could get is in that market," a banker noted. The new credit comprises a $110 million revolver, $15 million synthetic letter of credit facility and $250 million first-lien term loan. The revolver matures in five years and is being offered at LIBOR plus 2 1/2%, while the term loan and L/C facility have a tenor of six-and-a-half years and are priced at LIBOR plus 2 3/4%. Pricing on the floating-rate notes could not be determined.
Last week, the company announced it plans to prepare for an initial public offering. Officials from the lead banks either declined comment or did not return calls. Charles Horn, Builders' cfo, and Ramsey Frank, senior managing director with JLL, did not return calls.