BRP Preps $1.05B Refi-Divi Loan

Bombardier Recreational Products plans to launch a $1.05 billion term loan deal to refinance debt and pay a dividend to its private owners, according to sources.

The Valcourt, Québec-based company intends to use the proceeds to repay $675 million of existing term loans and pay dividends of $375 million to its owners—Bain Capital, the Bombardier family and Caisse de dépôt et placement du Québec—with $200 million paid at close and $175 million paid in calendar 2013.

RBC Capital Markets is the lead bank on the new loan deal.

Moody's Investors Service today affirmed the company’s corporate family rating at B1 and assigned a B1 rating to the proposed term loan. The rating outlook remains stable.
The new loan will increase BRP’s debt-to-Ebitda ratio to 3.7x from 2.7x, Moody’s says. But the rating agency expects the company to deleverage slightly in the next 12 to 18 months as stable demand for existing products and growth from new product introductions drives improved profitability and free cash flow.

BRP is a global manufacturer of motorized recreational products, including snowmobiles, personal watercraft, all-terrain vehicles and motorcycles. It was spun off from train and aircraft manufacturer Bombardier Inc. during the company’s restructuring in 2003, at which time majority ownership was transferred to Bain Capital.

Revenue for BRP for the last twelve months ended July 31, 2012 was $2.9 billion, according to Moody’s.