Dupont Performance lifts euro loan size, trims U.S. and euro pricing

By Sara Rosenberg

New York, Jan. 14 - Dupont Performance Coatings upsized its euro term loan to €390 million from about €150 million, and reduced pricing on all credit facility tranches, according to a market source.

The $2.3 billion seven-year covenant-light U.S. term loan is now talked at Libor plus 375 basis points, down from talk of Libor plus 425 bps, the source said.

At launch, the euro term loan was talked 25 bps wide of the U.S. term loan, which at initial talk would have put it at Euribor plus 450 bps, but with the flex to the U.S. term loan, euro term loan price talk is Euribor plus 400 bps, the source continued.

Also, the original issue discount on the U.S. and euro term loans was tightened to 99½ from 99.

The 1.25% floor and 101 soft call protection for one year on the U.S. and euro term loans were left unchanged.

Furthermore, pricing on the company's $400 million five-year revolver was lowered to Libor plus 375 bps from Libor plus 400 bps, the source remarked.

The revolver's 100 bps upfront fee was left intact.

Lastly, the accordion feature under the credit agreement was revised to $400 million from $600 million, plus an amount up to 4.25 times leverage, versus 4 times previously, and 50 bps MFN.

Commitments for the U.S. debt are due at 5 p.m. ET on Tuesday and commitments for the euro term loan are due on Wednesday. Originally, commitments were due at 5 p.m. ET on Thursday.

With the euro term loan upsizing, the company's euro bond deal was increased to €250 million from €230 million and its U.S. bond deal was downsized to $750 million from $1.1. billion, the source added. The notes are expected to price in the middle of this week.

Barclays, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., UBS Securities LLC, Jeffries Finance LLC and SMBC are leading the now $3.218 billion senior secured credit facility (B1/B+), up from $2.9 billion.

Proceeds from the credit facility and bonds will be used to help fund Dupont Performance Coatings' buyout by the Carlyle Group from DuPont for $4.9 billion.

Other funds for the transaction will come from equity.

Net senior secured leverage is 4.5 times, up from 4 times under the original structure, and net total leverage is 5.6 times.

Closing is expected this quarter, subject to customary conditions and regulatory approvals.

DuPont Performance Coatings is a Wilmington, Del.-based supplier of vehicle and industrial coating systems.

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