Royal Adhesives to launch $755 million credit facility on Monday

By Sara Rosenberg

New York, May 28 – Royal Adhesives & Sealants LLC is scheduled to hold a bank meeting at 3 p.m. ET in New York on Monday to launch a $755 million credit facility, according to a market source.

Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., Jefferies Finance LLC and KeyBanc Capital Markets are the leads on the deal.

The facility consists of a $50 million revolver, a $535 million seven-year first-lien covenant-light term loan and a $170 million eight-year second-lien covenant-light term loan, the source said.

Price talk on the first-lien term loan is Libor plus 375 basis points with a 1% Libor floor and an original issue discount of 99.5, and talk on the second-lien loan is Libor plus 775 bps to 800 bps with a 1% Libor floor and a discount of 99, the source continued.

The first-lien term loan has 101 soft call protection for six months, and the second-lien loan has call protection of 102 in year one and 101 in year two.

Commitments are due at 5 p.m. ET on June 11, the source added.

Proceeds will be used to help fund the buyout of the company by American Securities LLC from Arsenal Capital Partners.

Closing is expected in June, subject to customary conditions and regulatory approvals.

Royal Adhesives is a South Bend, Ind.-based producer of specialty adhesives and sealants.

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