Lyondell cuts pricing on $500 million term B to Libor plus 400 bps

By Sara Rosenberg

New York, March 25 - Lyondell Chemical Co. reverse flexed pricing on its $500 million six-year senior secured term loan B (Ba3) to Libor plus 400 basis points from Libor plus 425 bps, according to a market source.

In addition, the Libor floor on the term loan B was lowered to 1.5% from 2%, the source said.

The original issue discount on the term loan B was left unchanged at 99.

Recommitments are due from lenders on Friday at 4 p.m. ET.

Earlier this week, the term loan B had been downsized from $1 billion as the company's bond offering was increased to $2.75 billion from $2.25 billion, and the financial covenants were eliminated from the term loan B structure. Originally, the loan was going to include a maximum first-lien leverage ratio and a minimum interest coverage ratio.

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, with UBS the left lead.

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.

Lyondell's $2.25 billion credit facility also includes a $1.75 billion ABL revolver

Citigroup is the left lead on the ABL revolver.

Proceeds from the credit facility, the new 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.

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

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