Daily News: October 1, 2014

Bank Syndicate Provides KPS Capital Company Recap

KPS Capital announced its portfolio company Motor Coach Industries International completed a successful recapitalization. MCI raised a new $130 million term loan in conjunction with the amendment and extension of the company’s existing $115 million asset-based revolving credit facility. Proceeds were used to refinance outstanding debt, to fund a $120 million cash distribution to investors and to support the company’s continued growth.

The asset-based revolving credit facility was provided by a syndicate of banks with Wells Fargo Capital Finance acting as arranger, and the term loan financing was provided by TCW Direct Lending Group.

Houlihan Lokey Financial Advisors acted as exclusive financial advisor to the company and privately placed the financing.

Following the recapitalization, MCI remains conservatively capitalized with the continued support of its controlling shareholder, KPS, a private equity firm with more than $6.1 billion of assets under management. KPS, Daimler North America and MCI management continue to own 100% of the MCI organization following the recapitalization.

Rick Heller, CEO of MCI, said, “This successful recapitalization validates the incredible transformation MCI has made under KPS ownership and we are pleased to return capital to our stockholders. MCI is the clear market leader with demonstrated best-in-class quality, unmatched reliability, robust customer service and support, and the lowest total cost of ownership. Our conservative capital structure and the financial support of our stockholders provide us with the resources to support our customers and important growth initiatives. We thank our customers, suppliers and employees for their contributions to our remarkable success.”

Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to MCI with respect to the recapitalization.

MCI is a manufacturer of intercity coaches in the U.S. and Canada.