AOC/Aliancys ups term B to $510 million, flexes to Libor plus 425 bps

By Sara Rosenberg

New York, June 27 – AOC/Aliancys (Composite Resins Holding BV) upsized its seven-year senior secured covenant-light term loan B to $510 million from $500 million and raised pricing to Libor plus 425 basis points from talk in the range of Libor plus 375 bps to 400 bps, according to a market source.

Also, the 25 bps pricing step-down at 3 times net leverage was removed from the term loan and original issue discount talk was changed to a range of 98 to 98.5 from just 99.5, the source said.

In addition, the 101 soft call protection was extended to one year from six months, the MFN was revised to 50 bps for life with no carve-out from 75 bps with a 12-month sunset, and the excess cash flow sweep was modified to 75% with step-downs to 50%, 25% and 0% at 3 times, 2 times and 1.5 times first-lien net leverage from 50% with leverage-based step-downs to 0%.

Incremental facilities were changed to the greater of $100 million and 75% of EBITDA plus unlimited pari debt at 3.65 times first-lien net leverage and unlimited junior debt at 4.25 times net total leverage, from the greater of $120 million and 100% of EBITDA plus unlimited pari debt at 4 times first-lien net leverage and unlimited junior debt at 4.75 times, the source continued. And, the ability to test 2 times fixed charge coverage ratio for unsecured debt was removed.

Regarding asset sale, there is no step-down to mandatory prepayment obligations and retained asset sale proceeds from the available amount basket were eliminated.

Changes were also made to restricted payments/permitted investments and the EBITDA definition, and quarterly calls and management discussion and analysis are mandatory.

The term loan still has a 1% Libor floor.

Citigroup Global Markets Inc., Barclays, Deutsche Bank Securities Inc., Rabobank and Jefferies LLC are the joint lead arrangers on the deal. Citigroup is the administrative agent.

Commitments are due at noon ET on Thursday, with allocations afterward, the source added.

Proceeds will be used to fund the acquisition of AOC LLC by CVC Capital Partners and the merger of AOC with a portion of the Aliancys company, and to refinance existing debt.

Closing is expected in July, subject to customary regulatory approvals.

AOC is a Collierville, Tenn.-based producer of resin chemistries for composites and cast polymer applications. Aliancys, a CVC portfolio company and joint venture with Royal DSM, is a Schaffhausen, Switzerland-based manufacturer of quality resins.

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