Arizona Chemical sets first-, second-lien term loan talk with launch

By Sara Rosenberg

New York, May 28 - Arizona Chemical Inc. came out with price talk on its $675 million seven-year covenant-light first-lien term loan (BB-) and $205 million eight-year covenant-light second-lien term loan (B-) with its bank meeting on Wednesday, according to a market source.

The first-lien term loan is talked at Libor plus 375 basis points to 400 bps with a 1% Libor floor and an original issue discount of 991/2, and the second-lien term loan is talked at Libor plus 675 bps to 700 bps with a 1% Libor floor and a discount of 99, the source said.

Included in the first-lien term loan is 101 soft call protection for one year, and the second-lien term loan has hard call protection of 102 in year one and 101 in year two.

The company's $940 million credit facility also provides for a $60 million five-year revolver (BB-).

Commitments are due on June 9, the source added.

Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC, Jefferies Finance LLC and SunTrust Robinson Humphrey Inc. are the lead banks on the deal.

Proceeds will be used to refinance existing debt and fund a dividend.

Arizona Chemical is a Jacksonville, Fla.-based biorefiner of pine chemicals.

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