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Delrin shifts to all U.S. $700 million term loan, trims pricing
By Sara Rosenberg
New York, Oct. 12 – Delrin opted for an all U.S.-dollar $700 million seven-year first-lien term loan (B2/B+), removing plans for the loan to include a euro tranche with a minimum $500 million U.S. tranche, according to a market source.
In addition, pricing on the term loan was lowered to SOFR plus 425 basis points from SOFR plus 450 bps and a 25 bps step-down at 3.25x first-lien net leverage was removed, the source said.
Furthermore, the original issue discount on the term loan finalized at 98.5, the tight end of the 98 to 98.5 talk, and some changes were made to documentation.
As before, the term loan has a 25 bps step-down at 3.5x first-lien net leverage, a 25 bps step-down upon the consummation of an initial public offering, a 0.5% floor, 101 soft call protection for six months and amortization of 1% per annum.
The removed euro term loan tranche had been talked at Euribor plus 450 bps with a 0% floor, an original issue discount of 98 to 98.5, 101 soft call protection for six months and no amortization.
Goldman Sachs Bank USA, RBC Capital Markets, BMO Capital Markets, UBS Investment Bank, KeyBanc Capital Markets and KKR Capital Markets are the arrangers on the deal.
Recommitments were scheduled to be due at 3 p.m. ET on Thursday, the source added.
Proceeds will be used to help fund the acquisition of an 80.1% ownership interest in the company by The Jordan Co. from DuPont in a transaction valuing the business at $1.8 billion.
At close, DuPont will receive pre-tax cash proceeds of about $1.25 billion, subject to customary transaction adjustments, a note receivable of $350 million, and will own a 19.9% non-controlling common equity interest in Delrin.
Closing is expected around year-end, subject to customary conditions and regulatory approval.
Delrin is a producer of acetal homopolymer, a high-end engineering thermoplastic.
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