January 10, 2020 / 9:57 AM / 8 days ago

Evonik loan set for imminent second sell down

LONDON, Jan 10 (LPC) - Banks are to relaunch a second syndication process for the excess loans backing the buyout of German chemicals group Evonik’s methacrylates plastics unit, Madrid, which is set to total around €750m, banking sources said.

A bank meeting is expected to take place next week to show the deal to investors after the company’s performance bolstered lender confidence to return the deal to market, sources said.

More details will emerge shortly on the exact terms of the financing, when the deal officially relaunches.

Evonik agreed to sell its clear acrylic sheet unit to Advent International for €3bn in March 2019, backed with a €1.785bn-equivalent euro- and dollar-denominated leveraged loan financing.

It was increased by €21m prior to closing in June, to cover some of the issue discount on the loan after it priced at 500bp over Euribor/Libor with a 95 OID, having struggled during syndication as investors shied away from cyclical businesses.

A Most Favoured Nation (MFN) on the loan expired in December when arranging banks entered into a coordinated sell down process until the end of March 2020.

The MFN protected investors and stopped any of the arranging banks dumping the paper at a lower level in the secondary market. If the leads sold lower than 95%, then all of the investors that bought the deal in primary syndication would be compensated for the difference

While there have been frustrations among some banks eager to go off and do their own sell downs since the MFN expired, all have towed the party line and agreed to a synchronised approach, sources said.

Barclays, Deutsche Bank and Goldman Sachs are leading the financing alongside Bank of America, Bank of China, Helaba, HSBC, RBC and NatWest Markets.

Editing by Alasdair Reilly

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