Franklin and GSO lead $410m loan for Pittsburgh Glass

The unitranche loan backing a dividend recap for Pittsburgh Glass Works was split into first out and last out pieces and syndicated to different lenders.

BDC manager Franklin Square Capital Partners, along with its BDC sub-advisor GSO Capital Partners, has arranged a $410 million six-year unitranche financing for a dividend recap of Pittsburgh Glass Works. 

The automotive glass manufacturer and distributor is controlled by mid-market private equity firm Kohlberg & Co.

Franklin Square committed $181 million to the deal via its three BDCs; FS Investment Corporation (FSIC), FSIC II and FSIC III. 

The deal was syndicated out to a number of other lenders, said a source close to the financing. The $60 million first out piece was provided by Wells Fargo and Bank of America Merrill Lynch with one of the last out lenders also making a small commitment to the first out slice. 

The $350 million last out portion of the deal was syndicated to New Mountain Capital, Deutsche Bank, BlackRock Kelso, TCW and New Star Financial, said the source. 

The borrower opted for the Franklin Square / GSO-led deal over a bank-led broadly syndicated transaction because the alternative lender option offered greater security of execution, added the source. 

“We are pleased to provide a customized credit solution to a leader in the automotive glass industry like Pittsburgh Glass Works,” Michael C. Forman, chairman and chief executive officer of FSIC, FSIC II and FSIC III said in a statement. 

Kohlberg & Co bought the automotive glass business of PPG Industries in 2008. The deal gave PPG Industries $330 million in cash and a 40 percent minority stake in the new business.

Franklin Square managed roughly $17 billion in total assets, including $15.7 billion in BDC assets, as of 30 September.

New York-based GSO handles a variety of debt strategies on behalf of both its own funds and its sub-advisory role with Franklin Square. These include mezzanine, rescue lending funds, CLOs and credit hedge funds. The firm has about $80 billion in total assets under management.