NEW YORK, Sept 20 (LPC) - The US$6.44bn in term loans backing Carlyle Group and Singaporean wealth fund GIC’s acquisition of Akzo Nobel’s chemicals business allocated and broke for trading on Thursday.
The US$4.34bn seven-year term loan B broke at 100.375-100.75 on Thursday, while the US$2.1bn-equivalent euro-denominated facility broke at 100.5-101.
This is the second large deal breaking for secondary trading this week, following the US$9.25bn financing backing Blackstone Group’s purchase of a 55% stake in Refinitiv, Thomson Reuters’ Financial and Risk (F&R) division. Both transactions saw overwhelming demand that allowed issuers to increase the loan size and reduce pricing.
The issuer had increased the dollar tranche from US$3.9bn and cut pricing on the loan twice during syndication. Pricing on the US$4.34bn term loan B was finalized at 325bp plus Libor, tightened from earlier guidance of 350bp-375bp range and 400bp-425bp range at launch.
The US loan was sold at 99.5 cents on the dollar, versus guidance of 99.75. There is a soft call protection of 101 for six months.
Pricing on the euro term loan B was finalized at 375bp from guidance earlier Wednesday of 375bp-400bp over Euribor, down from 425bp at launch. There is a 0% floor and the loan was sold at par from early Wednesday guidance of 99.75.
Both loans also include a 25bp pricing stepdown at 4.25 times first-lien net leverage.
The pro forma leverage is estimated at 6.5 times by Moody’s Investors Service. The ratings agency expected the leverage to reduce over the next 18 months as the company’s financial performance should benefit from the launch of innovative new products and increased capacity following a cost reduction program.
“We expect the company to build up cash over time, which could serve to repay debt under the cash sweep clause,” Moody’s said.
Barclays, HSBC and JP Morgan are joint global coordinators and JP Morgan, the administrative agent, is also the sole physical coordinator on the dollar tranche.
Bookrunners are Credit Suisse, Deutsche Bank, Morgan Stanley, Royal Bank of Canada, Citi, Nomura, UBS, BNP Paribas, Credit Agricole CIB, Mizuho, MUFG, RBS, Societe Generale CIB and Bank of China.
Mandated lead arrangers are ABN AMRO, Commerzbank, Rabobank, SEB, Bank of Ireland, Standard Chartered, ING and AIB.
In March, Akzo Nobel announced it was selling the specialty chemicals business for a value of €10.1bn. The company said it expects the transaction to be completed by the end of the year.
The borrower is Starfruit FincoB.V., Starfruit US Holdco LLC. It has corporate ratings of B2/B+/B+ and facility ratings of B1/B+/BB-. (Reporting by Yun Li Editing by Michelle Sirra) Related Keywords))