PQ to launch $1.76 billion credit facility on Thursday

By Sara Rosenberg

New York, May 13 - PQ Corp. is scheduled to hold a bank meeting on Thursday afternoon to launch its proposed $1.76 billion credit facility, according to a market source.

UBS, Goldman Sachs and Lehman Brothers are the lead banks on the deal.

The facility consists of a $200 million revolver priced at Libor plus 325 basis points, a $1.1 billion first-lien term loan priced at Libor plus 325 bps and a $460 million second-lien term loan priced at Libor plus 650 bps, the source said.

The second-lien term loan has call protection of 102 in year one and 101 in year two.

There was an early syndication round for the deal, which was very successful, with both the first- and the second-lien term loans receiving a lot of commitments already, the source remarked.

The first-lien term loan is close to completion at an original issue discount of 91 and the second-lien term loan is close to completion at an original issue discount of 87, the source added.

Proceeds from the credit facility, which funded last year but never syndicated, were used to help fund the acquisition of the company by Carlyle Group in a transaction valued at $1.5 billion.

Following the buyout, PQ was combined with Ineos' silicas business so that Carlyle owns about 60% of the company, and Ineos owns about 40%.

PQ is a Malvern, Pa., producer of specialty inorganic chemicals, catalysts and engineered glass products.

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