Germany's Klockner sets pricing on $435 million term loan

By Paul A. Harris

Portland, Ore., June 28 - Klockner Pentaplast set the Libor spread for its $435 million term loan at 575 basis points with a 1.25% Libor floor on Thursday, according to an informed source.

The deal is talked at a discount of 98 to 98.5.

Commitments are due by July 16.

Jefferies & Co. is the lead bank on the deal.

The $500 million credit facility also features a $65 million revolver.

Proceeds will be used to help fund the company's recently completed recapitalization, under which it got the new debt facilities underwritten and funded by Jefferies and €190 million of cash equity from a group of new investors led by Strategic Value Partners LLC.

Other funds for the transaction will come from €255 million of second-lien notes that are expected to come to market sometime after July 4, the source added.

The new debt and equity were used to repay in full €800 million of first-lien senior secured credit facilities at par plus accrued interest.

Through the transaction, total debt has been reduced to €630 million from €1.26 billion with the equity infusion and the exchange of second-lien and mezzanine debt for equity.

Leverage is about 4.5 times, down from around 9 times previously.

As a result of the recapitalization, Klockner is now owned by the Strategic Value Partners investor group.

Klockner is a Montabaur, Germany-based producer of films for pharmaceutical, medical device, food, electronics and general-purpose thermoform packaging, as well as printing and specialty applications.

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