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Styrolution outlines U.S. and euro term loan B tranche sizes
By Sara Rosenberg
New York, Oct. 31 – Styrolution (Styrolution Group GmbH and Styrolution US Holding LLC) finalized its U.S. dollar five-year covenant-light term loan B (B2/B) size at $662.55 million and its euro five-year covenant-light term loan B (B2/B) size at €525 million, according to a market source.
At launch, the term loan B was described as a €1.05 billion equivalent loan, with the split of U.S. and euro debt to be determined.
Pricing on the term loan B debt is Libor/Euribor plus 550 basis points with a 1% Libor floor and an original issue discount of 98.
The term loan B has 101 soft call protection for one year.
Earlier in syndication, pricing was increased from talk of Libor/Euribor plus 450 bps to 475 bps, and the discount widened from 99.
Barclays, J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC are the bookrunners on the deal, with Barclays the left lead on the U.S. piece and JPMorgan the left lead on the euro piece.
Proceeds will be used to help fund Ineos’ acquisition of BASF SE’s 50% share in Styrolution so that it becomes a wholly owned standalone company within Ineos and to redeem Styrolution’s existing 7 5/8% senior secured notes due 2016.
Other funds for the transaction will come from a €200 million second-lien PIK toggle loan that was fully subscribed by Ineos Group Holdings.
The second-lien loan is priced at 9½% cash/10¼% PIK and has a mandatory PIK feature if net total leverage is more than 3.25 times.
Initially, the company was planning on getting €400 million of junior debt, but when the junior debt was downsized, the company decided to make up the remaining €200 million acquisition consideration with equity contributed by Ineos AG.
Styrolution is a Frankfurt, Germany-based styrenics supplier.
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