(Bloomberg) -- A group of banks led by Jefferies Financial Group Inc. has sweetened the terms on a proposed US$870 million leveraged loan for M2S Group Intermediate Holdings Inc. that failed to price as planned earlier this month.
Price talk on the deal, which S&P Global Ratings said would fund an $575 million acquisition by the label and packaging maker and refinance debt, now includes a margin of 475 basis points above the Secured Overnight Financing Rate, according to a person familiar with the matter. Early discussions were for a spread of 425 to 450 basis points.
The offer price has been slashed to 93 cents to 94 cents on the dollar, versus 99 cents previously, said the person, who asked not to be identified as they’re not authorized to speak publicly. Only two deals in 2024 have been issued at or below 95 cents, according to data compiled by Bloomberg, with the lowest being 93 cents for a $400 million Herbalife Ltd. loan.
After record activity earlier this year, US leveraged loans have been hit by the global market turmoil early this month. At least seven deals were pulled or postponed the past few weeks while prices in the secondary market briefly slumped the most since March 2023.
Commitments for the M2S loan were originally due Aug. 9. The deadline is now Aug. 21.
In addition to the sweetened pricing, deal terms have been revised to include standard blocker language that prohibit asset transfers, the use of unrestricted subsidiaries and other coercive tactics, the person said.
Representatives for Jefferies, M2S and Wynnchurch Capital, the private equity firm that owns M2S, didn’t reply to requests for comment. Wynnchurch invested in Wisconsin-based M2S in 2021.
--With assistance from Jeannine Amodeo and Michael Tobin.
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