LyondellBasell launches term loan B-2, guides OID in low-to-mid 90s

By Sara Rosenberg

New York, May 6 - LyondellBasell Industries launched its term loan B-2 in the United States on Tuesday and original issue guidance on the tranche emerged in the low-to-mid 90s context, according to market sources.

The term loan B-2 is comprised of roughly $2.5 billion plus €433 million.

A bank meeting for European investors will take place in London on Wednesday.

As was previously reported, the term loan B-2 is initially priced at Libor plus 375 basis points, with a 3.25% Libor floor, and the paper carries call protection of 103 in year one and 101½ in year two.

Goldman Sachs, Merrill Lynch, ABN Amro and UBS are the joint lead arrangers and joint bookrunners on the already funded deal, with Goldman the left lead.

Originally, Citigroup was the left lead bank on the deal, but sources said that the bank sold off its 20% share already and therefore is no longer involved.

"Pull out the 20% sold by Citi and some amortization and you have less than $2 billion for sale," one source remarked.

The term loan B-2 is part of about $9.5 billion in total term loan B debt that is currently in the company's possession.

The rest of the term loan B debt is divided between a term loan B-1 with no call protection and a term loan B-3 that is non-callable for two years.

The assumption is that Citi's 20% was taken equally out of each B loan tranche, sources said.

The term loan B-1 and term loan B-3, which have yet to be launched into syndication, are also comprised of roughly $2.5 billion plus €433 million, with pricing of Libor plus 375 bps and a 3.25% Libor floor.

Pricing on all three term loan B tranches can step down to Libor plus 350 bps if first-lien senior secured leverage is less than or equal to 1.625:1, according to an 8-K filed with the Securities and Exchange Commission Tuesday.

The term loan B financing is part of a senior secured credit facility that also includes a cash flow revolver, a term loan A, an ABL receivables purchase program facility and an ABL inventory-based facility.

In order for the term loan B debt to have a Libor floor, a three tranche structure and a 50 bps increase in pricing from when it funded in December, the company agreed to amend and restate the credit agreement, effective April 30.

The amendment and restatement also modified certain debt covenants, including increasing the debt basket, eliminating an interest rate hedging requirement, and adding a covenant prohibiting any reduction of aggregate commitments under the $750 million access group revolver before its initial maturity.

In addition, as part of the amendment and restatement, the company upsized its ABL inventory-based facility to $1.6 billion from $1 billion by using the accordion feature and that accordion feature was increased to $1.1 billion from $600 million, and pricing on the term loan A and cash flow revolver was raised.

The $2 billion term loan A and the $1 billion cash flow revolver are now priced at Libor plus 350 bps. Pricing on the term loan A and the revolver can step down to Libor plus 325 bps if first-lien senior secured leverage is less than or equal to 1.625:1. Pricing on the revolver can further drop to Libor plus 300 bps if leverage is less than or equal to 1.000:1.

The ABL debt was syndicated last year, with the $1.15 billion receivables purchase program facility pricing at Libor plus 150 bps and the ABL inventory-based facility pricing at Libor plus 175 bps.

Proceeds from the credit facility were used to help fund Basell AF SCA's acquisition of Lyondell Chemical Co. for $48 per common share in an all-cash transaction with a total enterprise value of about $19 billion, including the assumption of debt.

LyondellBasell is a Netherlands-based polymers, 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.