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LPC-Allnex seeks €1.8bn divi recap loan as investor demand rockets
March 8, 2017 / 2:25 PM / 9 months ago

LPC-Allnex seeks €1.8bn divi recap loan as investor demand rockets

LONDON, March 8 (Reuters) - Allnex is conducting a €1.8bn-equivalent loan to back a dividend recapitalisation that will net a €425m payout to its owners, ditching plans to reprice an existing loan after huge demand from investors for the Belgian chemicals company to issue new paper, banking sources said.

Advent International-owned Allnex launched a cross-border repricing of its €730m term loan and US$698.2m term loan on February 28 and commitments were due March 3, but in an unusual move, reverse enquiries from institutional investors led the company to launch a dividend recapitalisation instead, the sources said.

In addition to the existing loans, there will be a new €425m-equivalent loan, split between euros and dollars, the sources said.

“It is unusual to go from a repricing to a dividend recap but it is a function of the market, which is red hot -- enough to do a proper upsize,” a senior loan banker said.

The euro loans are guided to pay 325bp-350bp over Euribor with a 0% floor, in line with the initial repricing while the dollars are guided to pay 325bp-350bp, with a 0.75% floor, 25bp higher than where the repricing was guided.

The existing money will be offered at par, while the new money is offered at 99.75 OID.

“The price range on the euros didn’t change as a result of the dividend, whereas the price range of the dollars went up by 25bp. It is a function of where the demand is coming from and the euro demand is insane,” the banker said.

Morgan Stanley is sole coordinator and lead bookrunner, while ING is bookrunner and agent.

Lenders have been asked to commit to the deal by Thursday.

Cash-rich investors to Europe’s leveraged loan market have been desperate for new paper, following a spate of repricings and refinancings of existing deals.

Allnex’s existing loans formed part of a US$1.525bn-equivalent financing raised in June 2016 to back Allnex’s acquisition of New Zealand chemicals company Nuplex Industries and to refinance debt at both companies.

Both the euro and dollar term loans priced in June 2016 at 425bp over Euribor, with a 0.75% floor and 99.5 OID. (Editing by Christopher Mangham)

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