Arizona Chemical sets structure on $426 million facility ahead of Thursday launch

By Sara Rosenberg

New York, Jan. 29 - Arizona Chemical came out with tranche sizes on its proposed $426 million credit facility as the deal is getting ready to launch with a bank meeting on Thursday, according to a market source.

Goldman Sachs is the lead bank on the deal.

Tranching on the deal is comprised of a $50 million revolver, a $240 million first-lien term loan B and a $136 million second-lien term loan, the source said.

Of the total first-lien term loan B amount, $140 million will be in dollars and $100 million will be in the euro equivalent.

The second-lien term loan carries call protection of 102 in year one and 101 in year two.

All that was known previously on the structure was that there would be a revolver, a first-lien term loan that will have both euro and dollar tranches, and a second-lien term loan.

Proceeds from the credit facility will be used to help fund Rhone Capital III LP's buyout of the company from International Paper for about $485 million.

As part of the transaction, International Paper will acquire a minority interest of about 10% in the acquisition vehicle to be formed by Rhone Capital.

The transaction is expected to close in the first quarter, subject to certain customary closing conditions.

Leverage through the first-lien will be roughly 3.2 times and total leverage will be roughly 5.0 times.

Arizona Chemical is a Jacksonville, Fla., supplier of pine chemicals to the adhesives, inks and coatings and oleochemicals markets.

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