Lyondell Chemical's exit financing granted bankruptcy court approval

By Lisa Kerner

Charlotte, N.C., March 24 - Lyondell Chemical Co.'s exit financing was approved, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company launched its $500 million six-year senior secured term loan B with price talk in the Libor plus 425 basis points area with a 2% Libor floor and its $1.75 billion ABL revolver with talk of Libor plus 375 bps with a 2% Libor floor.

UBS, Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, JPMorgan, Morgan Stanley and Wells Fargo are the joint bookrunners on the term loan B.

Citigroup is the left lead on the ABL revolver.

Covenants under the term loan B include a maximum first-lien leverage ratio and a minimum interest coverage ratio.

Prospect News reported that security for the term loan B following the company's emergence from bankruptcy will be a first-priority lien on substantially all of the issuer's and each subsidiary guarantors' existing future property and assets other than the assets securing the U.S. ABL revolver, 100% of the capital stock of each U.S. subsidiary, 65% of the capital stock of LyondellBasell Subholdings BV and a second-priority lien on the assets that secure the U.S. ABL revolver.

Proceeds from the $2.25 billion credit facility, $2.75 billion of 71/2-year senior secured notes, a new European securitization facility and a $2.8 billion rights offering will be used to repay and replace existing debt, including the company's debtor-in-possession facilities and an existing European securitization facility and to make related payments, when the company exits bankruptcy.

Regarding the notes which were upsized to $2.75 billion, Lyondell said it is planning to price some bonds denominated in U.S. dollars and some in euros and tranche sizes have not yet been determined.

Sources said price talk on the dollar portion of the deal is for a yield of 8% to 8¼%, with an anticipated discount of between zero and 1 percentage point while talk on the euro portion is for a yield between 8 1/8% and 8 3/8%, also with a discount between zero and 1 percentage point.

Joint bookrunners for the notes deal are Bank of America Merrill Lynch, UBS Investment Bank, Barclays Capital, Citigroup, Credit Suisse, Deutsche Bank, JP Morgan, Morgan Stanley and Wells Fargo Securities.

The court also authorized the debtors to form LBI Escrow Corp. for the purpose of issuing the notes and placing the proceeds into escrow, pending confirmation, the filing said.

Lyondell is a U.S. subsidiary of LyondellBasell Industries AF SCA, a Netherlands-based polymer, petrochemicals and fuels company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.