Dynacast cuts spread on first-lien term loan to Libor plus 425 bps

By Sara Rosenberg

New York, Jan. 27 – Dynacast International reduced pricing on its $530 million seven-year first-lien term loan (Ba3/B) to Libor plus 425 basis points from talk of Libor plus 450 bps to 475 bps, according to a market source.

Also, the 101 soft call protection on the first-lien term loan was extended to one year from six months, the source said.

The first-lien term loan still has a 1% Libor floor and an original issue discount of 99.

Pricing on the company’s $170 million eight-year second-lien term loan (Caa1/B-) was unchanged at Libor plus 850 bps with a 1% Libor floor.

The original issue discount on the second-lien term loan firmed at 98, the wide end of the 98 to 98˝ talk, the source continued.

As before, the second-lien term loan has call protection of 102 in year one and 101 in year two.

J.P. Morgan Securities LLC, Barclays and Macquarie Capital are the leads on the $700 million of new term loans.

Recommitments were due on Tuesday, the source added.

Proceeds will be used to help fund the buyout of the company by Partners Group.

The transaction has an overall enterprise value of $1.1 billion.

Partners Group is buying Dynacast from existing financial investors and is joined in the acquisition by Kenner & Co., an existing shareholder, and the company’s management team, which will both roll over significant equity stakes into the new transaction.

Closing is expected in February, subject to regulatory approvals and customary conditions.

Dynacast is a Charlotte, N.C.-based manufacturer of small, highly complex metal components.

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