Royal Adhesives shifts funds between term loans, reduces pricing

By Sara Rosenberg

New York, June 10 – Royal Adhesives & Sealants LLC upsized its seven-year first-lien covenant-light term loan to $560 million from $535 million and downsized its eight-year second-lien covenant-light term loan to $145 million from $170 million, according to a market source.

Also, pricing on the first-lien term loan was lowered to Libor plus 350 basis points from Libor plus 375 bps, and pricing on the second-lien term loan was trimmed to Libor plus 750 bps from talk of Libor plus 775 bps to 800 bps, the source said.

Furthermore, the original issue discount on the second-lien term loan was tightened to 99.25 from 99, the source continued.

The discount on the first-lien term loan remained at 99.5.

Both term loans still have a 1% Libor floor, the first-lien term loan still has 101 soft call protection for six months, and the second-lien loan still has call protection of 102 in year one and 101 in year two.

The company’s $755 million credit facility also includes a $50 million revolver.

Commitments were due at 5 p.m. ET on Wednesday, accelerated from Thursday, the source added.

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

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

Closing is expected this month, 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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