AZ Chem ups loan to $530 million, cuts spread to Libor plus 500 bps

By Sara Rosenberg

New York, Nov. 17 - Arizona Chemical Inc. (AZ Chem) upsized its credit facility (B1/B+) to $530 million from $520 million and reduced pricing to Libor plus 500 basis points from talk of Libor plus 525 bps to 550 bps, according to a market source.

The 1.75% Libor floor was left unchanged.

The facility now consists of a $60 million revolver, up from $50 million, and a $470 million term loan B.

Also, the original issue discount on the term loan B was tightened to 98½ from 98, the source said.

The B loan still provides for 101 soft call protection for one year.

Recommitments were due from lenders on Wednesday.

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.

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.

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

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