Solenis downsizes four-part bond offering, sets tranche sizes, talk; pricing Tuesday

By Paul A. Harris

Portland, Ore., Sept. 20 – Solenis downsized its four-part offering of high-yield notes by around $300 million equivalent and shifted the proceeds to its concurrent bank loan, a market source said on Monday.

The resized bond portion of the acquisition financing comes as follows:

• $815 million of seven-year senior secured notes (B2/B-) talked to yield in the 4½% area (initial guidance low 5% area);

• €500 million of seven-year senior secured notes (B2/B-) talked to yield in the 4% area (initial guidance low 4% area);

• $400 million of eight-year senior unsecured notes (Caa2/CCC+) talked to yield in the 6½% area (initial guidance high 6% to 7% area); and

• €265 million of eight-year senior unsecured notes (Caa2/CCC+) talked to yield in the 5½% area (initial guidance high 5% to 6% area).

The unsecured notes’ size decreased from $1 billion equivalent, with proceeds shifted to the concurrent term loan, the final tranche sizes of which are $1.11 billion and €500 million.

Books for the Rule 144A bond deal close at 10 a.m. ET on Tuesday.

BofA Securities Inc. is the left bookrunner. Goldman Sachs & Co. LLC, Barclays, BMO Capital Markets Corp., Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, Nomura Securities International Inc., HSBC Securities (USA) Inc., ING Financial Markets LLC, Jefferies LLC, Macquarie Capital (USA) Inc. and RBC Capital Markets LLC are the joint lead bookrunners.

The notes in all four tranches become callable after three years at par plus 50% of their respective coupons. A special call provision allows the issuer to redeem 10% of the secured notes in both tranches annually at 103 during the non-call periods.

Proceeds plus an equity investment and new credit facilities will be used to help fund Platinum Equity's acquisition of Solenis UK International Ltd., comprising substantially all operations of the Solenis business, and its subsequent combination with existing Platinum Equity portfolio company Sigura Water.

The issuing entity will be Olympus Water US Holdings Corp.

Solenis, formerly Ashland Water Technologies, is a Wilmington, Del.-based manufacturer of specialty chemicals for the pulp, paper, oil and gas, chemical processing, mining, biorefining, power and municipal markets.

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