Element Solutions, MacDermid get $400 million incremental term loans

By Marisa Wong

Los Angeles, Sept. 1 – Element Solutions Inc. and MacDermid, Inc. entered into an incremental term facility on Sept. 1 to the credit agreement dated Jan. 31, 2019 with Barclays Bank plc as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The borrowers borrowed new term loans totaling $400 million through a corresponding increase to the existing $750 million tranche B term loans under the credit agreement.

Proceeds of the new loans were used to finance a portion of the purchase price of the previously announced acquisition of Coventya Holdings SAS, which closed on Wednesday for a purchase price of roughly €420 million.

The new loans have identical terms as the existing term loans, including a maturity date of Jan. 31, 2026.

Interest remains at a spread of 200 basis points over Libor, subject to a 0% Libor floor.

The amended credit agreement provides for senior secured credit facilities in an aggregate principal amount of $1.48 billion, consisting of a revolver totaling $330 million and term loans totaling $1.15 billion.

In anticipation of the close of the incremental amendment, on Aug. 6 Element Solutions had entered into swap transactions with some banks included in the syndicate of the new term loans.

Under the swap agreements, the company is required to make periodic euro-denominated coupon payments to the hedge counterparties on an aggregate initial notional amount of about €340 million in exchange for periodic dollar-denominated coupon payments from the hedge counterparties on an aggregate initial notional amount of $400 million. Each swap matures on Jan. 31, 2025.

Element is a Fort Lauderdale, Fla.-based provider of specialty chemical solutions.

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