Arizona Chemical sets final terms on resized $880 million term loans

By Paul A. Harris

Portland, Ore., June 6 - Arizona Chemical Inc. resized the tranches of its $880 million two-part term loan deal – shifting $55 million to the first-lien tranche from the second-lien tranche – and set final pricing on Friday, according to a market source.

The seven-year covenant-light first-lien term loan (BB-) was upsized to $730 million from $675 million. The Libor spread is now 350 basis points, down from the 375 to 400 bps spread talk. The 1% Libor floor and the 99.50 OID were unchanged.

The eight-year covenant-light second-lien term loan (B-) was downsized to $150 million from $205 million. The Libor spread came at 650 bps, 25 bps below the tight end of the 675 to 700 bps spread talk. The discount was also cut, with the price moving to 99.50 from 99. The 1% Libor floor remained unchanged.

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-).

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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