Term Loan B Facility - Interactive Term Sheet

Transaction Summary ▼

Borrower

TechManufacturing Inc.

Guarantors

All material domestic subsidiaries

Facility Type

Senior Secured Term Loan B (Institutional Loan)

Facility Amount

$200,000,000

Purpose

LBO financing, refinance existing debt, and transaction fees

Maturity

8 years from closing

Amortization Schedule ▼

Scheduled Amortization 1% ANNUAL

1.00% per annum (0.25% quarterly)

Example on $200M

Payment Type	Amount
Quarterly payment	$500,000
Annual payment	$2,000,000
Total over 8 years	$16,000,000 (8%)
Balloon at maturity	$184,000,000 (92%)

Key Point

Minimal amortization preserves cash flow; refinancing expected before maturity

Interest Rate & Fees ▼

SOFR Loans

Term SOFR + Credit Spread

SOFR Floor

0.75% (minimum rate even if SOFR falls below)

Credit Spread NO PRICING GRID

Fixed at closing based on market conditions
Typical Range: SOFR + 3.50% to 5.00%
This Deal: SOFR + 4.00%

Base Rate Loans

Base Rate + Credit Spread
Base Rate = highest of: Prime, Fed Funds + 0.50%, 1-month SOFR + 1.00%
Base Rate Spread: 3.00% (100 bps below SOFR spread)

Original Issue Discount (OID)

98.00 (borrow $200M, receive $196M)
Effective yield boost: ~2% or 25 bps annually over life

Upfront Fee

2.00% to arrangers ($4,000,000)

Administrative Agent Fee

$75,000 annually

Collateral & Security ▼

Security

First priority lien on substantially all assets (pari passu with TLA and Revolver)

Collateral Package

Same collateral package as TLA
Shared first lien on all assets
65% pledge cap on foreign subsidiaries

Intercreditor

Pari passu with TLA ($75M) and Revolver ($50M)

Financial Covenants COVENANT-LITE ▼

Covenant Structure

NO maintenance covenants (no quarterly leverage or coverage tests)
Only Incurrence Covenants: Restrictions apply only when taking specific actions

Springing Financial Covenant (Revolver Only)

If > 35% of Revolver is drawn:
Maximum Total Net Leverage: 7.50:1.00
Tested quarterly only while revolver > 35% drawn
Does NOT apply to TLB lenders (cov-lite protection)

Purpose

Protects revolver lenders only; TLB has no quarterly testing

Key Negative Covenants (Incurrence-Based) ▼

Debt Incurrence - Permitted if ANY basket applies

1. Fixed Dollar Basket: Additional debt up to $50M

2. Ratio Basket: Unlimited debt if pro forma Total Net Leverage ≤ 5.50:1.00

3. Other Permitted Debt:

Existing debt listed on schedule
Refinancing of existing debt
Capital leases up to $20M
Intercompany debt

Restricted Payments (Dividends) - Permitted if ANY basket applies

1. Available Amount Basket:

Starts at $0
Builds with 50% of cumulative net income (from closing)
Plus 100% of equity proceeds
Less prior restricted payments

2. Ratio Basket: Unlimited if pro forma Total Net Leverage ≤ 4.50:1.00

3. Fixed Dollar Basket: Up to $25M in aggregate

Acquisitions - Permitted if:

Same or related business
Pro forma Total Net Leverage ≤ 5.50:1.00 (or use fixed basket up to $75M)
No event of default
Target becomes guarantor

Key Difference from TLA: Much higher leverage threshold (5.50x vs 3.75x)

Mandatory Prepayments VERY LIMITED ▼

Debt Issuance

100% of net proceeds from non-permitted debt

Asset Sales

Offer to purchase (not mandatory) after reinvestment period
Reinvestment Period: 18 months

Insurance/Condemnation

Offer to purchase (not mandatory) after reinvestment period

Excess Cash Flow NONE

No excess cash flow sweep (major difference from TLA)

Key Point

TLB has minimal mandatory prepayments—borrower-friendly structure

Prepayment Rights & Protections ▼

Voluntary Prepayments

Permitted at any time in $5M increments

Call Protection (Soft Call) - 101/50 Structure

Years 1-2:

101% premium IF prepaying with cheaper debt
AND refinancing ≥ 50% of facility

After Year 2: No premium

Prepayments from operations, asset sales, or equity: No premium at any time

Repricing Protection

If spread-reducing amendment in first 18 months:
1% fee on repriced amount
Protects lenders from immediate spread reduction

Incremental Facilities ▼

Permitted Additional Debt

Option 1 - Ratio Based: Unlimited if Total Net Leverage ≤ 5.50:1.00 after incurrence
Option 2 - Fixed Basket: Up to $100M regardless of leverage

Can be used for:

Incremental Term Loan B
Incremental Revolver
Other pari passu or junior debt

Key Point

Can borrow more money without existing lender approval (if tests met)

Events of Default ▼

Standard Events Include

Payment default (principal immediately, interest after 3 days)
Breach of covenant (30 day cure for affirmative covenants)
Cross-default to debt > $75M (higher than TLA threshold)
Bankruptcy/insolvency
Judgments > $75M
Change of control
Material inaccuracy in representations

Key Differences from TLA

Higher monetary thresholds ($75M vs $5M)
No quarterly financial covenant testing (cov-lite)
Fewer technical default triggers

Secondary Market Features ▼

Minimum Assignment

$1,000,000 (encourages trading)

Settlement

T+7 (7 business days)

Borrower Consent

Not required for assignments (institutional loan)

Quotation

Price as % of par (e.g., 98.50 or 102.00) plus accrued interest

CUSIP/ISIN

Assigned for trading identification