January 10, 2020 / 1:28 PM / 7 days ago

UPDATE 1-Evonik loan set for second sell down

(Firms up details and adds bank dates)

By Claire Ruckin

LONDON, Jan 10 (LPC) - Banks have launched a second syndication process for the excess loans backing the buyout of German chemicals group Evonik’s methacrylates plastics unit, Madrid, which totals just under €650m, banking sources said.

A bank meeting is set to take place on January 13 to relaunch the deal to investors after the company’s performance bolstered lender confidence to return the deal to market, sources said.

Investors will be asked to recommit to the loan by January 28.

Evonik agreed to sell its clear acrylic sheet unit to Advent International for €3bn in March 2019, backed with a €1.785bn-equivalent euro- and dollar-denominated leveraged loan financing.

It was increased by €21m prior to closing in June, to cover some of the issue discount on the loan after it priced at 500bp over Euribor/Libor with a 95 OID, having struggled during syndication as investors shied away from cyclical businesses.

A Most Favoured Nation (MFN) on the loan expired in December when arranging banks entered into a coordinated sell down process until the end of March 2020.

The MFN protected investors and stopped any of the arranging banks dumping the paper at a lower level in the secondary market. If the leads sold lower than 95%, then all of the investors that bought the deal in primary syndication would be compensated for the difference

While there have been frustrations among some banks eager to go off and do their own sell downs since the MFN expired, all have towed the party line and agreed to a synchronised approach, sources said.

Arranging banks have managed to sell down a large portion of the loan, with around a third of the euros and just over half of the dollars remaining.

Barclays, Deutsche Bank and Goldman Sachs are leading the financing alongside Bank of America, Bank of China, Helaba, HSBC, RBC and NatWest Markets.

Editing by Alasdair Reilly

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