LONDON, Jan 29 (Reuters) - Dutch discount retailer Action has launched a €2.4bn leveraged loan to refinance existing debt and pay a dividend to shareholders, banking sources said.
ABN AMRO, BNP Paribas, Deutsche Bank, ING, Natixis and Rabobank are leading the financing and a bank meeting will take place on Thursday to show the deal to investors.
A €2.285bn seven-year term loan B will refinance an existing €1.6bn term loan B and will also pay a dividend to shareholders.
The new TLB will be covenant-lite, removing a net leverage covenant in the existing covenant-loose term loan.
The dividend recapitalisation will re-lever Action to 4.8 times Ebitda, from 3.0 times, the sources said.
Action has performed well and managed to grow despite being in the retail sector, which has come under strain in light of reduced consumer spending.
“Action’s story is just amazing when you think about the sector it is in. Every now and again a retail brand goes out there and changes the market, the Action story has a great track record and continues to grow,” a senior banker said.
The financing also includes a €125m six-year revolving credit facility to replace an existing €75m RCF.
Lenders have been asked to commit to the financing by February. S&P and Moody’s corporate and facility ratings remain unchanged at B+/B1 with stable outlooks.
Action was last in the marker in May 2017 when it repriced its €1.6bn TLB to 350bp over Euribor, from 425bp. That loan was issued with a 0% floor at par and included 101 soft-call protection for six months.
It is unclear whether pricing on the new term loan will remain in line with existing levels or price tighter or wider. Pricing will emerge at the bank meeting.
Action, owned by 3i since 2011, has nearly 1,100 stores across seven European countries. It had net sales of 2016 of €2.7bn. (Editing by Christopher Mangham)