PQ launches $900 million term loan B at Libor plus 275-300 bps

By Sara Rosenberg

New York, May 19 – PQ Corp. launched on its call on Wednesday a $900 million seven-year senior secured covenant-lite term loan B with price talk of Libor plus 275 basis points to 300 bps with a 25 bps step-down at 0.5x inside closing date first-lien net leverage, a 0.5% Libor floor and an original issue discount of 99.5, according to a market source.

The term loan has 101 soft call protection for six months and amortization of 1% per annum, the source said.

Mandatory prepayments are from 50% of excess cash flow, subject to step-downs, 100% of asset sale proceeds, subject to step-downs and reinvestment rights, and 100% of debt issuance proceeds, other than permitted debt.

Security is a first-lien on all capital stock and fixed assets of the borrowers and guarantors subject to customary exceptions, and a second-lien on all ABL collateral.

Expected term loan ratings are B1/BB-.

Citigroup Global Markets Inc. is the lead arranger on the deal. Credit Suisse Securities (USA) LLC is the administrative agent.

Commitments are due at noon ET on May 26, the source added.

Proceeds will be used to refinance a portion of the company’s existing term loan B’s due in 2027.

Closing is expected during the week of May 31.

PQ is a Malvern, Pa.-based producer of specialty inorganic performance chemicals and catalysts.

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