*Cleanzine-logo-7a.jpgCleanzine: your weekly cleaning and hygiene industry newsletter 2nd July 2020 Issue no. 925

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ISS receives strong support for refinancing and extension of debt

Last week, ISS A/S announced that it had received commitment for the refinancing of its Second Lien Facility and had received strong support from lenders consenting to extend the predominant part of the company's senior debt.

ISS furthermore received consent for the implementation of other amendments intended to increase both operational and refinancing flexibility around the use of divestment proceeds as well as certain post-IPO flexibilities.

ISS Group CFO Henrik Andersen commented:

"Throughout the refinancing process we have received strong support from existing lenders and a number of new investors supporting ISS and our strategy. With the refinancing and the amendment and extension of the majority of our debt in place ISS has addressed all relevant short term maturities. Furthermore, with the improved flexibility we are now able to use the proceeds from our on-going divestments against the most expensive part of our debt and through this further deleveraging our balance sheet. This will include the expected proceeds from our sale of parts of our pest control activities for an enterprise value of approximately DKK 2 billion announced on 18th March."

On 4th March 2013, ISS requested a three year extension of DKK 18.6 billion worth of facilities, which were set to mature in December 2014 and April 2015. At the same time, ISS sought lender consent for a number of amendments of the senior facilities. Finally, ISS announced the intention to refinance its EUR 600 million Second Lien Facility which was set to mature in June 2015.

By the deadline for responses on 21st March, consent was obtained to all requested amendments well in excess of the required majority. Furthermore, extensions were accepted by 92% of the lenders in the tranches for which ISS requested extension, meaning that approximately DKK 17.1 billion of ISS' debt will be extended to either December 2017 or April 2018.

The new tranches refinancing the EUR 600 million Second Lien Facility were oversubscribed multiple times. The refinancing of the Second Lien Facility was split between two tranches of EUR 330 million and USD 350 million respectively. The new tranche in USD will provide ISS with a natural currency hedge against its USD-related earnings and provide access to the very liquid USD institutional loan market.

A waiver fee of 10 bps will be paid to all consenting lenders, and the extending lenders will receive an additional fee of up to 40 bps. Once effective, the margin will increase 50 bps on Term Facility B and 25 bps on the Revolving Credit Facility, the L/C Facility as well as Acquisition Facility B leaving all extended tranches at an initial margin of 400 bps, but with step-downs applying following a leverage ratchet. On the new term facilities refinancing the Second Lien Facility margins will be 350 bps on the EUR tranche and 275 bps (with a 1% LIBOR floor) on the USD tranche.

The refinancing of the Second Lien Facility and the extension of the relevant facilities will be completed by the end of April.


11th April 2013

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