Versum cuts spread on $575 million term loan B to Libor plus 275 bps

By Sara Rosenberg

New York, Sept. 19 – Versum Materials LLC reduced pricing on its $575 million seven-year covenant-light term loan B to Libor plus 275 basis points from talk of Libor plus 300 bps to 325 bps, according to a market source.

As before, the term loan B has a 25 bps step-down in pricing when total net leverage is less than 2.5 times, a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for one year, the source said.

Amortization on the term loan B is 1% per annum.

Mandatory prepayments are from 100% of asset sales, subject to reinvestment rights, 100% of debt issuance, subject to permitted debt, and 50% of excess cash flow, with leverage-based step-downs.

Commitments are due at noon ET on Tuesday, accelerated from 5 p.m. ET on Thursday, the source added.

Allocations are expected on Wednesday.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and Wells Fargo Securities LLC are the joint lead arrangers on the deal. Co-managers include Bank of America Merrill Lynch, Mizuho and MUFG.

The company’s $775 million senior secured credit facility (Ba1/BB+) also provides for a $200 million five-year revolver.

The new bank debt is being done in connection with the company’s spin-off from Air Products and Chemicals Inc. and will be used to help fund a distribution to Air Products.

The company also intends to distribute in-kind to Air Products up to $425 million of unsecured senior notes.

Versum Materials is a Tempe, Ariz.-based producer of critical materials, including high purity process materials, cleaners and etchants, slurries, organosilanes and organometallics and equipment for the semiconductor and display industries.

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