Matter No.: 1005-00001
Team,
One week out. Below is a comprehensive status update across all workstreams for the Nexford Industrial Holdings Inc. $1,400,000,000 senior secured Term Loan B refinancing and dividend recapitalization. We're in good shape, but there's a meaningful amount of execution work between now and next Friday.
Quick reference on the key players:
- **Borrower:** Nexford Industrial Holdings Inc. - **Sponsor:** Granite Peak Capital Partners, LP (through Granite Peak NIH Holdings, LLC) - **Administrative Agent / Collateral Agent / Lead Left Arranger:** Crescent Harbor Bank, N.A. - **Agent's Counsel:** Whitfield & Gage LLP (Margaret Ashby / Jonathan Ferris) - **Target Closing Date:** March 28, 2025 - **Target for Execution-Ready Documents:** March 24, 2025 - **Pre-Closing / Signature Circulation Begins:** March 25, 2025
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**1. CREDIT AGREEMENT — STATUS** ✅ On Track
W&G circulated their third draft on March 17. We returned our marked version on March 18 (blackline also circulated). The Credit Agreement Issues List — Version 3.0 went out March 19, and the vast majority of items are now resolved.
We've communicated the final handful of open points to Jonathan Ferris and are awaiting W&G's response — I expect we'll get these buttoned up early next week. The remaining open items are limited and principally involve minor definitional issues and schedule clean-up.
Key commercial terms are substantially agreed:
- **Facility:** $1,400,000,000 Term Loan B - **Interest Rate:** Term SOFR + 400 bps; SOFR floor of 0.75%; CSA of 10 bps (1-month) / 15 bps (3-month) - **Maturity:** 7 years (March 28, 2032) - **Amortization:** 1.00% per annum ($3,500,000 quarterly) - **OID:** 50 bps (issue price 99.50); arrangement fee: 50 bps - **Springing Financial Covenant:** Maximum 5.00x first lien net leverage, tested only when revolving borrowings exceed 40% of revolving commitments (no new revolver being established in this transaction) - **MFN Protection:** 50 bps threshold, 12-month sunset for incremental term loans - **Change of Control:** Triggered by acquisition of >35% voting equity by non-Granite Peak persons, Nexford ceasing to be direct wholly-owned sub of Holdings, or cross-trigger under Senior Unsecured Notes Indenture - **Excess Cash Flow Sweep:** 50% (stepping to 25% at ≤4.25x, 0% at ≤3.50x first lien net leverage) - **Soft Call:** 101 for repricing within 6 months - **Default Rate:** +200 bps - **Incremental Facility:** Free-and-clear basket of greater of $280,000,000 and 100% LTM EBITDA, plus unlimited at 4.50x pro forma first lien net leverage - **Restricted Payments:** $25,000,000 annual general basket; builder basket ($50,000,000 starter plus 50% cumulative CNI from Q1 2025); unlimited at ≤3.75x total net leverage - **Governing Law:** New York
**Target:** Near-final / execution-ready draft by March 24.
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**2. USE OF PROCEEDS / FUNDS FLOW** ✅ On Track
Sources & uses framework is confirmed:
| Use
- **Pro forma cash:** $100,000,000 - **Pro forma first lien net leverage:** ~3.38x (($1.4B – $100M) ÷ $385M Adj. EBITDA) - **Pro forma total net leverage:** ~4.03x (includes $250,000,000 Senior Unsecured Notes due 2028)
I'll circulate the draft funds flow memorandum tomorrow (March 22). Final execution version targeted for March 27.
Payoff letter from Atlas Meridian (Sandra Vickers) is expected by March 25 — we'll review and confirm payoff amount and lien release commitments upon receipt. Wire instructions for Nexford accounts, Atlas Meridian payoff, and Granite Peak NIH Holdings dividend are due from the parties by March 26.
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**3. SYNDICATION STATUS** ✅ On Track
General syndication target close was today (March 21). Ironwood Capital Markets, LLC and Northvane Securities, Inc. joined as joint lead arrangers on March 7, and lead arranger / anchor investor allocations were finalized on March 14.
Confirmed preliminary commitments from the syndicate:
| Lender
**Ratings:** Keystone Ratings Group assigned B1 CFR / B1 facility rating; Sentinel Credit Analytics assigned B+ CCR / BB- facility rating (reflecting collateral coverage).
Claudia spoke with Elaine Prescott (Crescent Harbor) on March 18 regarding timing — syndication tracking well, and no market flex exercise is anticipated. Upfront fee to participating lenders is 100 bps.
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**4. SECURITY, GUARANTEE, AND PLEDGE DOCUMENTS** ✅ On Track
First drafts of the Guarantee Agreement, Security Agreement (personal property), Holdings Pledge Agreement, and Borrower Pledge Agreement were circulated by C&H on March 10. Revised drafts of the Guarantee Agreement and Security Agreement incorporating W&G's comments went out March 17. Execution versions of all security documents are targeted for closing on March 28.
Full list of collateral documents:
- **Guarantee Agreement** — Holdings Guarantor: Granite Peak NIH Holdings, LLC; 11 Subsidiary Guarantors: NPC, NES, NCST, NMS, NP LLC, NIH Intl, Clearfield, Summit, Ridgepoint, Lakeshore - **Security Agreement** — Personal property; first priority lien on substantially all assets - **Holdings Pledge Agreement** — 100% equity in Nexford - **Borrower Pledge Agreement** — 100% equity in direct domestic subsidiaries - **Subsidiary Pledge Agreements** — Lower-tier sub equity - **CFC Holdco Limited Pledge Agreement** — Nexford International Holdings, Inc. pledging 65% voting / 100% non-voting equity in Nexford Canada Holdings ULC - **IP Security Agreement** — Patents, trademarks, copyrights - **Deposit Account Control Agreements** — Accounts at Crescent Harbor Bank and Redstone National Bank (accounts ending in -4471, -4472, -6633) - **Securities Account Control Agreements** - **Intercompany Note** — Nexford to subsidiaries, endorsed and pledged to Collateral Agent
**Collateral includes:** equity interests, accounts receivable, inventory, equipment, IP, deposit accounts, securities accounts, general intangibles, owned real property (>$10M FMV — four properties), material intercompany notes, and proceeds.
**Excluded assets:** motor vehicles <$250K book value per vehicle, LC rights <$1M, commercial tort claims <$2.5M, assets where pledging cost would be excessive.
**Sophie** — please confirm DACAs with Redstone National Bank are on track. We need executed versions by closing.
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**5. MORTGAGED PROPERTIES — POST-CLOSING** ⏳ Post-Closing (April 30)
Four mortgaged properties (total appraised value: $193,000,000):
1. **1400 Industrial Parkway, Schaumburg, IL 60173** — $85,000,000 (Corp HQ / primary manufacturing; Cook County recording) 2. **2750 Commerce Drive, Rockford, IL 61101** — $42,000,000 (Precision Components; Winnebago County recording) 3. **600 Manufacturers Row, Greenville, SC 29607** — $38,000,000 (Engineered Systems; Greenville County recording) 4. **9100 Westpark Industrial Boulevard, Houston, TX 77063** — $28,000,000 (Coatings; Harris County recording)
Mortgages are post-closing deliverables with a deadline of **April 30, 2025**. Draft mortgages are being prepared by C&H with input from Hargrove & Whitmore (Robert Kimura) for the IL properties. Title insurance commitments from Landmark Title Assurance Company are under review. Appraisals have been completed by Greystone Valuation Services, Inc. (Daniel Pritchard).
**Sylvia** — please confirm status of the state/local mortgage recording tax analysis for all four jurisdictions. We need that finalized before we file.
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**6. INTERCREDITOR AGREEMENT** ✅ On Track
The First Lien/Unsecured Intercreditor Agreement — between Crescent Harbor (First Lien Collateral Agent) and Pinnacle Trust Company (Unsecured Notes Trustee), with Nexford as borrower party — is progressing.
W&G circulated the first draft on March 12. We returned our marked draft on March 19 (blackline also circulated). The agreement addresses priority of first lien secured claims vs. unsecured claims on shared collateral, enforcement standstills, and proceeds waterfall.
The existing $250,000,000 7.250% Senior Unsecured Notes due 2028 (Pinnacle Trust Company as trustee) are not being refinanced. The credit agreement also includes provisions permitting the Admin Agent to enter into a First Lien/Second Lien Intercreditor Agreement if second lien debt is later incurred.
**Target:** Near-final draft by March 23.
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**7. UCC FILINGS** ✅ On Track
UCC-1 financing statements have been prepared for all 13 Loan Party debtors across six filing jurisdictions:
- **Delaware Secretary of State:** Nexford (DE File No. 5765432), Holdings (DE File No. 7234891), NPC, NES, NCST, NP LLC, NIH Intl - **Illinois Secretary of State:** NMS - **Pennsylvania Department of State:** Clearfield - **South Carolina Secretary of State:** Summit - **Texas Secretary of State:** Ridgepoint - **Michigan Department of State:** Lakeshore
All name Crescent Harbor Bank, N.A. as Secured Party. To be filed on March 28 (closing date).
UCC-3 Termination Statements for all existing Atlas Meridian liens — instructions and forms are prepared; to be filed March 31 (post-closing).
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**8. CLOSING CERTIFICATES AND OFFICER'S CERTIFICATES** ✅ On Track
Drafts are being prepared for March 26 target (preparation date); execution at closing March 28:
- **Closing Certificate of Borrower** — conditions precedent satisfied - **Officer's Certificate** (Michelle Kaplan, CFO) — reps & warranties true, no default - **Secretary's Certificate of Borrower** (David Engstrom) — incumbency, board resolutions (adopted January 13, 2025), organizational documents (certificate of incorporation, bylaws) - **Secretary's Certificate of Holdings** (Granite Peak NIH Holdings, LLC) — manager/member resolutions (adopted January 13, 2025), certificate of formation, LLC agreement - **Secretary's Certificates for each of 11 Subsidiary Guarantors** — resolutions, org docs, incumbency - **Solvency Certificate** (Michelle Kaplan, CFO) — consolidated solvency of Nexford and subsidiaries - **Pro Forma Compliance Certificate** — first lien net leverage ~3.38x and total net leverage ~4.03x, each well below 5.00x covenant threshold - **Use of Proceeds Compliance Certificate** — Sanctions/OFAC/anti-corruption compliance; no Loan Party or known agent is a Sanctioned Person; proceeds not used in violation of OFAC, FCPA, USA PATRIOT Act, BSA
Good standing certificates have been ordered for all Loan Parties from respective Secretaries of State — must be dated within 5 business days of closing. Certified copies of organizational documents are also being obtained.
**Sophie** — please track the good standing certificate orders. Make sure we have coverage for all 13 entities (Borrower, Holdings, 11 Subsidiary Guarantors) and confirm receipt timeline.
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**9. LEGAL OPINIONS** ✅ On Track
**C&H opinions** (to Crescent Harbor as Administrative Agent):
- NY law enforceability opinion (Credit Agreement, Guarantee Agreement, Loan Documents) — no conflicts - UCC perfection opinion (security interests perfected upon UCC-1 filing and delivery of pledged collateral) - Preliminary draft opinion circulated internally and to W&G on March 20 for review - Internal memo on opinion assumptions and limitations in progress — target March 24 - Opinion back-up certificate to be executed by Nexford at closing
**Local counsel opinions:**
- **Hargrove & Whitmore LLP** (Robert Kimura) — Illinois law enforceability and perfection opinion - **Briarcliff Legal Group PA** (Catherine Ellsworth) — Delaware entity opinions (organization, good standing, authority for all Delaware entities)
Instructions on form and scope were sent to both local counsel on March 12. We need to follow up with both firms to confirm drafts will be ready for our review by March 24-25.
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**10. TAX WORKSTREAM** ✅ Complete (Sylvia)
All four tax memoranda have been completed:
- Dividend recap structure and tax consequences (February 28) - Section 163(j) interest deductibility analysis (March 5) - Withholding / FATCA / treaty analysis for lenders (March 7) - State and local tax — collateral grants and mortgage recording taxes (March 10)
W-8/W-9 collection checklist was circulated March 14 — Sophie is tracking. We need to confirm all W-9s have been received from domestic Loan Parties before closing.
**Sylvia** — any open items on the mortgage recording tax front we need to flag before we finalize the mortgage drafts?
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**11. DUE DILIGENCE** ✅ Complete
Due diligence is substantially complete. The status tracker was last updated March 20. All major diligence memos have been delivered:
- Existing Credit Agreement and amendments review - Existing Indenture review - Existing lien/security package analysis - UCC search results (all jurisdictions) - IP lien searches (USPTO, Copyright Office) - Real property title and survey review - Phase I ESA reviews (Clearwater Environmental Sciences / Dr. Nathan Foley — four properties) - Insurance program review (Vantage Risk Advisors / Rachel Sorensen; carriers: Continental Shield Underwriters (P&C), Meridian Specialty Insurance (D&O)) - Material contract review - Litigation and contingent liability review - Regulatory/compliance review (OFAC, sanctions, anti-corruption, AML) - Tax structure and dividend recap analysis - Canadian subsidiary / cross-border issues (Nexford Canada Holdings ULC, Nexford Canada Manufacturing, Inc. — foreign subs, not guarantors)
**No material open diligence items.**
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**12. COORDINATION WITH OTHER COUNSEL / PARTIES**
- **Sponsor's Counsel:** Kellner Brandt & Associates LLP (Patricia Voss) — coordinating on Holdings resolutions and equity pledge; no open issues - **Nexford Management Team:** David Engstrom (GC), Michelle Kaplan (CFO), Priya Mehta (VP Treasury) — all have been responsive; need to confirm officer availability for signing on March 28 - **Financial Advisor:** Stonebridge Advisory Group (Andrew Castellano) — no open items from our side - **Existing Lender:** Atlas Meridian Bank, N.A. (Sandra Vickers) — payoff letter and lien release authorization expected March 25-27
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**13. CLOSING WEEK TIMELINE**
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**ACTION ITEMS / REQUESTS**
Please review your respective workstream sections above and **flag any concerns or blockers by end of day Monday, March 24**.
A few specific asks:
- **Sophie:** (1) Confirm DACAs with Redstone National Bank are on track for closing; (2) track good standing certificate orders for all 13 entities and confirm receipt timeline; (3) confirm W-9 collection status for domestic Loan Parties. - **Sylvia:** (1) Confirm status of state/local mortgage recording tax analysis for all four jurisdictions; (2) flag any open items on mortgage recording taxes before we finalize drafts. - **Claudia:** You may want to send a pre-closing status update to David Engstrom and Michelle Kaplan early next week — I'm planning to send a separate closing logistics email to all counsel on March 25, so a client-facing note on or around March 24 would time nicely. - **Ian:** Reminder that Ian is billing partner on this one. Any budget or billing questions should go to him directly (billing code **IBL-NIH-2025-031**).
I'll be working through the weekend on the funds flow memo and intercreditor turn. Will have my phone on if anything comes up.
Thanks to everyone for the push — we're in good shape, and one strong week gets us to the finish line.
Marcus
--- Marcus Leung Senior Associate Calderwood Harkness LLP mleung@calderwoodharkness.com