Armacell adjusts first-lien U.S. and euro term loan sizes, flexes up

By Sara Rosenberg

New York, June 25 - Armacell downsized its U.S. seven-year first-lien covenant-light term loan (B2/B) to $185 million from $210 million and upsized its euro seven-year first-lien covenant-light term loan (B2/B) to €120 million from €100 million, according to a market source.

Also, pricing on the U.S. first-lien term loan was increased to Libor plus 450 basis points from talk of Libor plus 350 bps to 375 bps, and pricing on the euro first-lien term loan was lifted to Euribor plus 475 bps from talk of Euribor plus 375 bps to 400 bps, the source said.

Furthermore, the original issue discounts on the first-lien term loans were revised to 98½ from 991/2.

The first-lien loans still have a 1% floor and 101 repricing protection for one year.

Meanwhile, pricing on the $85 million 71/2-year second-lien covenant-light term loan (Caa2/CCC+) was flexed up to Libor plus 850 bps from talk of Libor plus 725 bps to 750 bps, and the original issue discount was changed to 97 from 99, the source continued.

Additionally, the second-lien loan is now non-callable for one year, then at 102 in year two and 101 in year three, instead of having call protection of 102 in year one and 101 in year two.

As before, the second-lien loan has a 1% Libor floor.

In addition to the term loans, the company is getting a $65 million revolver.

Other changes made to the credit agreement include increasing the excess cash flow sweep to 75% from 50%, with step-downs to 50% at 4½ times total net leverage, 25% at 4 times net leverage and 0% at 3½ times net leverage; removing the 18-month MFN sunset; and reducing the incurrence ratio for unlimited first-lien incremental facilities to 3½ times first-lien net leverage from 4 times.

Recommitments are due at noon ET on Wednesday, the source added.

Credit Suisse Securities (USA) LLC, BNP Paribas Securities Corp. and HSBC Securities (USA) Inc. are the lead banks on the deal.

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

Munster, Germany-based Armacell is a manufacturer of engineered foams.

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