Arizona Chemical talks $520 million loan at Libor plus 525-550 bps

By Sara Rosenberg

New York, Nov. 5 - Arizona Chemical Inc. is talking its $520 million credit facility (B1/B+) at Libor plus 525 basis points to 550 bps with a 1.75% Libor floor, according to a market source.

The facility consists of a $50 million revolver and a $470 million term loan B.

The term loan B is being offered at an original issue discount of 98 and carries 101 soft call protection for one year, the source said.

Goldman Sachs is the left lead bank on the deal. GE Capital and KeyBank have put in sizeable commitments, so they were both named joint bookrunners and GE got the title of administrative agent.

The facility was launched with a bank meeting on Thursday afternoon, but ratings didn't come out until late in the day, and as a result, price talk was not announced until Friday morning.

Proceeds will be used to help fund American Securities' purchase of a controlling interest in the company from Rhone Capital.

Rhone, along with other current investors and the management team, will retain 25% of the company's ownership.

The transaction is expected to close in the fourth quarter, subject to regulatory approvals and customary conditions.

Corporate ratings are B1/B.

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

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