Gun Accessory Maker Sweetens Terms on Struggling Bond Sale

Magpul Industries Corp., a maker of high-capacity magazines and other rifle accessories, has made a number of creditor-friendly changes to its proposed bond sale after receiving tepid demand from investors.

The company, which is controlled by private investment firm Albion River, has been looking to sell bonds to pay a special dividend and refinance debt.

It has now cut the size of the bond, hiked the proposed yield and offered buyers a more senior position in the capital structure to drum up demand, according to people with knowledge of the matter.

The revised structure includes $250 million of first-lien bonds at a yield of up to 7%, according to the people, who asked not to be named because the sale is private. That compares with a $300 million second-lien bond the company started marketing last week at a yield of about 5.5%.

While Magpul has performed particularly well during the pandemic, the deal has been turned down by some investors on environmental, social and governance concerns because of its exposure to the gun industry, the people said.

Other investors have expressed concerns about the subordinated structure of the original offering as well as the size of the dividend itself, one of the people said.

A representative for B. Riley Securities, which is leading the bond offering, declined to comment. Magpul and Albion did not immediately respond to requests for comment.

Magpul is expected to price the bond sale later this week.

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