In addition to the repricing, the amendment will see the removal of the fixed charge cover covenant as well as seeking “certain technical amendments to avoid [an] inconsistency in terms”.
The sponsor justifies the amendment on the basis of a fall in leverage. Since last September’s buyout, Brenntag’s leverage has fallen through the senior, second-lien and mezzanine loans to 3.8x, 4.8x and 5.8x from a respective 4.2x, 5.3x and 6.4x. Lenders are being offered a 5bp work fee.
Senior debt facilities will now be split between a €200m revolver paying 200bp over Euribor down from 225bp, a €150m euro term loan A paying 175bp down from 225bp, a €590.2m euro/sterling term loan B paying 200bp down from 275bp, a €611.1m dollar term loan B paying 200bp down from 250bp, a €60.7m Swiss franc term loan B paying 225bp down from 275bp and a €125m term loan C paying 225bp down from 300bp.
Junior debt is split between a €100m second lien-loan paying 400bp down from 650bp, a €179.4m dollar second lien also paying 400bp and a €390.1m mezzanine loan paying 700bp (split 400bp cash and 300bp PIK) down from 900bp (500bp cash and 400bp PIK).
Bain Capital sold Brenntag to BC Partners last July. The original facilities were split between a €165m eight-year B6 tranche paying 275bp over Libor, a €93.5m 9-1/2 year second-lien loan at 650bp and a pre-placed €96.7m 10-year bullet mezzanine piece paying 500bp cash and 400bp PIK. Lenders are also being asked to recommit to drawn loans totalling €2.01bn, a €200m revolver and an undrawn €234.8m acquisition facility. The new structure includes €854m of equity.
Brenntag has a presence in more than 300 locations in 50 countries and supplies industrial and speciality chemicals to a number of industries in the manufacturing sector.