As pricing tightens, AkzoNobel's upsized dollar loan playing to $10 billion book

By Paul A. Harris

Portland, Ore., Sept. 19 – AkzoNobel NV revamped the financing backing Carlyle Group's buyout of the company on Tuesday.

The revisions see €385 million equivalent shifted to bank loans from bonds in a transfer that leaves the overall bond amount at €1 billion equivalent and the loans at €5.5 billion equivalent.

The loan portion of the financing sees spread talk on an upsized €3.71 billion equivalent (about $4.3 billion) dollar-denominated seven-year term B flex downward to Libor plus at Libor plus 350 basis points to 375 bps from 400 bps to 425 bps. The discount is cut to 99.75 from 99 to 99.5. The loan, which was upsized from €3,325,000,000 equivalent, retains its 0% Libor floor, as well as 101 soft call protection for six months.

That portion of the deal is playing to around $10 billion of orders, according to a trader who added that tighter talk is unlikely to shrink demand substantially.

The €1.79 billion seven-year term loan B, unchanged in size, sees spread talk decreased to Euribor plus 375 bps to 400 bps from 425 bps and the discount cut to 99.75 from 99 to 99.5. The loan retains its 0% Euribor floor and 101 soft call protection for six months.

Both loan tranches will have one pricing step-down at 4.25 times first lien net leverage. A step-down that would have been triggered by an IPO has been removed from both tranches.

Both the bond and loan portions of the financing are set to price and allocate on Thursday.

Proceeds will be used to help fund the buyout of AkzoNobel Specialty Chemicals by the Carlyle Group and GIC from AkzoNobel for an enterprise value of €10.1 billion.

Messer Industries sets talk

Messer Industries set price talk for its $2.85 billion equivalent of first-lien term loans (B1/BB-) following launch of the transaction at a bank meeting in New York on Monday.

The company is offering a $2,225,000,000 dollar tranche at Libor plus 325 bps to 350 bps with a 0% Libor floor and an original issue discount of 99.5.

The company is also offering a $625 million equivalent euro-denominated tranche at Euribor plus 350 bps to 375 bps with a 0% Euribor floor and an original issue discount of 99.5.

Commitments are due by Oct. 1.

Goldman Sachs Bank USA is the lead bookrunner on the U.S. tranche, and UBS Investment Bank and Citigroup Global Markets Inc. are the lead bookrunners on the euro tranche. Managing lead arrangers are Goldman Sachs, UBS, Citigroup, ING, UniCredit, BNP Paribas, Deutsche Bank, Mizuho, Bayern LB and Helaba.

Proceeds will be used to fund the acquisition by Messer Group and CVC Capital Partners of Linde AG’s gases business in North and South America for $3.3 billion.

Tuesday inflows

The cash flows of the dedicated bank loan funds were positive on Tuesday, the most recent session for which data was available at press time, a trader said.

The loan funds saw $50 million of inflows on the day.

Week to date loan funds are tracking $131 million of inflows, from last Thursday's open.

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