As pricing tightens, AkzoNobel's upsized dollar loan playing to $10 billion book

By Paul A. Harris

Portland, Ore., Sept. 19 – AkzoNobel NV revamped the financing backing Carlyle Group's buyout of the company on Tuesday.

The revisions see €385 million equivalent shifted to bank loans from bonds in a transfer that leaves the overall bond amount at €1 billion equivalent and the loans at €5.5 billion equivalent.

The loan portion of the financing sees spread talk on an upsized €3.71 billion equivalent (about $4.3 billion) dollar-denominated seven-year term B flex downward to Libor plus at Libor plus 350 basis points to 375 bps from 400 bps to 425 bps. The discount is cut to 99.75 from 99 to 99.5. The loan, which was upsized from €3,325,000,000 equivalent, retains its 0% Libor floor, as well as 101 soft call protection for six months.

That portion of the deal is playing to around $10 billion of orders, according to a trader.

The €1.79 billion seven-year term loan B, unchanged in size, sees spread talk decreased to Euribor plus 375 bps to 400 bps from 425 bps and the discount cut to 99.75 from 99 to 99.5. The loan retains its 0% Euribor floor and 101 soft call protection for six months.

Both loan tranches will have one pricing step-down at 4.25 times first lien net leverage.

Proceeds will be used to help fund the buyout of AkzoNobel Specialty Chemicals by the Carlyle Group and GIC from AkzoNobel for an enterprise value of €10.1 billion.

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