BRP seeks loan to finance dividends - Trade Only Today

BRP seeks loan to finance dividends

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Bombardier Recreational Products, the maker of jet skis and outboard motors that’s owned by Bain Capital LLC, is seeking a $1.05 billion term loan to fund a dividend and refinance debt.

“A person with knowledge of the transaction” told Bloomberg Businessweek that the debt will pay interest at 4 percentage points more than the London interbank offered rate. Libor, a rate banks say they can borrow in dollars from each other, will have a 1.25 percent floor.

BRP is proposing to sell the loan at 99 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.

Royal Bank of Canada, Bank of Montreal, UBS AG and Bank of America Corp. are arranging the financing for the Valcourt, Québec- based company and commitments are due on Wednesday, the unnamed source told the publication.

The company canceled plans for the dividend loan last year, citing market conditions, and instead opted for a $125 million add-on term loan to its existing credit facility, according to data Bloomberg compiled.

Valerie Bridger, a spokeswoman for Bombardier Recreational, didn’t immediately respond to an e-mail seeking comment.

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