Molycorp gets $635 million bridge loan for Neo Material purchase

By Sara Rosenberg

New York, March 14 - Molycorp Inc. has received a commitment for a $635 million one-year senior secured bridge loan to help fund its acquisition of Neo Material Technologies Inc., according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

Morgan Stanley Senior Funding Inc. and Credit Suisse Securities (USA) LLC are the joint lead arrangers and bookrunners on the deal.

Pricing on the loan is Libor plus 650 basis points, increasing by 50 bps after three months and every three months thereafter. There is a 1.5% Libor floor.

Permanent financing is expected to include long-term debt, existing cash on hand of the combined company and the proceeds from any equity issuances.

Under the agreement, Molycorp is buying Neo Material for C$1.3 billion, consisting of C$8.05 in cash and 0.1220 shares of common stock per share.

Closing is expected in the second or third quarter, subject to the approval of Neo Materials shareholders, regulatory approvals and other customary conditions.

Molycorp is a Greenwood Village, Colo.-based producer of rare earth oxides, rare earth metals, rare earth alloys and rare metals. Neo Material is a Toronto-based producer, processor and developer of neodymium-iron-boron magnetic powders, rare earths and zirconium based engineered materials and applications, and other rare metals and their compounds.

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