Element Solutions launches $400 million term loan at 99.03-99.5 OID

By Sara Rosenberg

New York, June 16 – Element Solutions Inc. launched on Wednesday its fungible $400 million tack-on senior secured term loan B (Ba1/BBB-) due Jan. 31, 2026 with original issue discount talk of 99.03 to 99.5, according to a market source.

Pricing on the tack-on term loan is Libor plus 200 basis points with a 0% Libor floor, in line with pricing on the company’s existing $733 million term loan B.

The tack-on term loan and existing term loan are getting 101 soft call protection for six months, the source said.

Ticking fees on the tack-on term loan are half the margin from days 46 to 90 and the full margin thereafter.

Amortization on the term loan is 1% per annum.

Goldman Sachs Bank USA, Citigroup Global Markets Inc., JPMorgan Chase Bank, Barclays and BofA Securities Inc. are the lead arrangers on the deal.

Commitments are due at noon ET on June 23.

Proceeds will be used with cash on hand to fund the acquisition of Coventya Holding SAS for about €420 million, including the assumption or repayment of debt, subject to certain adjustments.

Closing is anticipated late in the third quarter or in the fourth quarter, subject to regulatory approvals, completion of required employee consultation procedures and other customary conditions.

Pro forma net leverage is expected to remain at or below 3x at year-end 2021.

Element Solutions is a Fort Lauderdale, Fla.-based diversified specialty chemicals company. Coventya is a France-based provider of specialty chemicals for the surface finishing industry.

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