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Orion Engineered launches term loans, sets talk at 325 bps spread
New York, July 25 – Orion Engineered Carbons SA set talk on its planned €665 million equivalent of seven-year term loans at Libor plus 325 basis points and Euribor plus 325 bps, according to a market source.
The original issue discount is talked at 99.5, and the term loans have a 1% floor for Libor or Euribor.
There is also 101 soft call protection for six month.
Commitments are due on Aug. 6.
The loans were launched at a bank meeting in New York on Friday. Orion will also hold a bank meeting in London on Monday.
The €665 million total term loan will be split between euro and dollar tranches. About €265 million equivalent is expected to be denominated in dollars.
The €780 million credit facility also includes a €115 million multicurrency five-year revolver.
Goldman Sachs Bank USA and UBS AG are the joint global coordinators and joint bookrunners on the deal, Barclays, JPMorgan and Morgan Stanley are joint bookrunners, and DZ Bank AG, Fifth Third Bank, HSBC Bank and Mediobanca SpA are mandated lead arrangers.
Proceeds will be used to refinance existing debt, including the company’s €284 million of 10% senior secured notes due 2018 and $280 million of 9 5/8% senior secured notes due 2018.
The credit facility is being done in connection with the company’s initial public offering of common shares, which priced after the close Thursday. In the IPO, the company sold 19.5 million common shares at $18.00 each for a total of $351 million. All proceeds from the IPO went to Kinove Luxembourg Holdings 1 Sarl, which will use the funds to help repay its $425 million 9¼%/10% PIK toggle notes due 2019 and for a distribution to shareholders.
Orion Engineered Carbons is a Frankfurt, Germany-based supplier of Carbon Black.
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