Lead arranger Barclays has set price talk on the $855 million first-lien term loan for Apex Tool Group LLC that will be used to refinance the company's existing capital structure, according to sources. Commitments to the deal will be due by noon ET on Feb. 3.

Price talk on the seven-year term loan is set at a spread of 525-550 basis points over the secured overnight financing rate plus a credit spread adjustment, with a 0.5% floor and an original issue discount in the range of 99-99.5. The credit spread adjustment will be 10 bps for a one-month rate, 15 bps for a three-month rate and 25 bps for a six-month rate. Lenders will be offered six months of 101 soft call protection.

At initial guidance, yield to maturity is approximately 5.97%-6.33%.

Financing for the refinancing also includes a $350 million privately placed second-lien term loan and new cash equity from Bain Capital.

The issuer currently has a first-lien term loan due August 2024 (L+550, 1.25% Libor floor) that totals approximately $825 million. The existing term loan, which had its maturity extended to August 2024 in August 2019, was recently downgraded at the beginning of December 2021 by S&P Global Ratings to CCC, from CCC+. The corporate rating was also lowered at the same time one notch to CCC, with a negative outlook.

Sparks, Md.-based Apex Tool Group is a global manufacturer of hand and power tools for industrial, commercial and retail customers. It is owned by Bain Capital Partners LLC.