Styron ups first-lien term loan to $800 million, drops second-lien

By Sara Rosenberg

New York, June 3 - Styron increased the size of its first-lien term loan (BB-) to $800 million from $675 million and eliminated the $125 million second-lien term loan (B-) from its capital structure, according to a market source.

In addition, price talk on the first-lien term loan was raised to the Libor plus 550 basis points area from Libor plus 475 bps, the original issue discount guidance was revised to 98½ to 99 from just 99, and 101 soft call protection for one year was added.

The first-lien term loan still provides for a 1.75% Libor floor.

The second-lien term loan that was canceled was being talked at Libor plus 775 bps with a 1.75% Libor floor and an original issue discount in the 98 to 99 area. The tranche was going to carry call protection of 103 in year one, 102 in year two and 101 in year three.

As before, Styron's $1.04 billion credit facility includes a $240 million revolver (BB-).

Deutsche Bank, Barclays and HSBC are the lead banks on the credit facility, with Deutsche the left lead.

Commitments are still due from lenders on Monday.

Proceeds will be used to help fund the buyout of the company by Bain Capital from Dow Chemical for $1.63 billion.

Under the agreement, Dow Chemical has an option to receive up to 15% of the equity of Styron as part of the sale consideration.

The transaction is expected to close by August, subject to the completion of customary conditions and regulatory approvals.

Styron is a diversified chemicals and plastics company that is expected to have $3.5 billion in revenue based on 2009.

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