Ineos downsizes to €1.7 billion equivalent, drops unsecured dollar tranche, sets talk

By Paul A. Harris

Portland, Ore., Jan. 20 – Ineos Quattro downsized its bond offering to €1.7 billion equivalent from €2 billion and withdrew a proposed dollar-denominated unsecured tranche, according to market sources.

The revised deal features €800 million of five-year non-call two-year first-lien senior secured notes (BB/BB+) talked to yield 2½% to 2¾% versus initial guidance of 2¾% to 3%.

The offering also features $500 million of five-year non-call two-year first-lien senior secured notes (BB/BB+) talked to yield in the 3½% area versus initial guidance in the 3¾% area.

The secured notes will be issued by Ineos Quattro Finance 2 plc.

The sole unsecured tranche is a downsized €500 million amount of long five-year non-call two-year unsecured notes (B+/BB-) talked to yield 3¾% to 4% versus initial guidance of 4% to 4¼%. The unsecured portion of the deal decreased from €1 billion equivalent with the withdrawal of the dollar-denominated unsecured notes.

The unsecured notes will be issued by Ineos Quattro Finance 1 plc.

Late Wednesday, when books closed for the dollar-denominated notes, the $500 million tranche was heard to be playing to $4 billion of orders, a trader said.

Books close Thursday morning for the euro-denominated tranches.

Citigroup Global Markets Inc. is lead left for the dollar-denominated tranches.

Barclays, HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC are leads on the euro-denominated tranches.

BNP Paribas Securities Corp. is also a joint global coordinator and bookrunner.

ABN Amro Inc., BofA Securities Inc., Commerz Markets LLC, Credit Agricole CIB, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Fifth Third Securities Inc., ICBC Standard Bank plc, ING Financial Markets LLC, Intesa Sanpaolo, Lloyds Securities Inc., Mizuho Securities USA Inc., Morgan Stanley & Co. LLC, NatWest Markets Securities Inc. and Santander Investment Securities Inc. are also joint bookrunners.

Proceeds, together with a concurrent upsized €2.9 billion term loan, from €2.6 billion, and cash on hand will be used to repay the bridge loan taken out to finance the acquisition of BP’s aromatics and acetyls businesses, refinance the company’s term loan and pay the deferred considerations owed to BP for the acquisition.

Financing also consists of a bank loan that was upsized to €3.15 billion equivalent from a revised amount of €2.9 billion equivalent and an initial size of €2.6 billion equivalent.

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