Litany of woe

Turmoil in the leverage market was leaving few deals unscathed last week, with upward flexes and additional fees reported on a good number of deals. With the hedge funds more or less absent from the market and CLOs generally sitting on their hands, bankers said virtually every deal reliant on fund support was struggling.

As a result, arrangers have little choice but to attempt to restructure existing deals and tailor new deals to meet the more conservative lending appetite of traditional bank lenders.

ING as MLA and bookrunner has completed the €1.18bn debt package supporting Carlyle‘s buyout of Zodiac Marine, a pool care product company. In keeping with the poor market theme, the deal required an upward flex on the term loan with funds offered an OID of 50bp.

Senior debt is now split between a €680m eight-year term loan B now paying 275bp up from 250bp over Libor, a €120m seven-year revolver at 200bp and a €80m seven-year capex at 200bp. In addition there is a €150m nine-and-a-half-year second lien loan and a €150m mezzanine loan.

Opening leverage is 4.9x debt to Ebitda to senior debt rising to 6x through the second lien and 7.2x in total.

ING and Morgan Stanley have closed the €825m debt package supporting the recapitalisation of Arcapita’s Paroc Holding Sverige, a stone wool producer. A flex was required on the B, second lien and mezzanine portions. In addition funds were paid an OID of 50bp.

The senior and junior debt package is now split between a €550m term loan B paying 262.5bp up from 237.5bp over Libor, a €40m revolver at 200bp, a €85m capex at 200bp, a €56.7m second lien at 425bp up from 400bp and a €93.3m mezzanine loan at 850bp up from 800bp.

The €912.5m debt package supporting LBO France‘s recapitalisation of Terreal has allocated via MLA ING. The facility launched prior to the turbulence now affecting the leverage market, and initially found a good response. However, later fund push back means there has been a flex across the structure. In addition an OID of 1% was offered on the B tranche.

Debt is now split between a €150m seven-year term A loan paying 200bp up from 187.5bp over Libor, a €627.5m eight-year B loan at 250bp up from 225bp, a €45m seven-year revolver and €90m acquisition facility both now paying 200bp.

The recapitalisation is levered at 6.2x and will pay a dividend to LBO France leaving €150m of cash equity in Terreal.

The €345m recapitalisation of IMCD, mandated to ING as MLA and bookrunner has allocated following a flex on the B tranche and the addition of an OID of 50bp. The chemical distributor is owned by ABN AMRO Capital.

Senior debt is split between a €85m seven-year amortising term loan A paying 200bp over Libor, a €172.5m eight-year term loan B at 250bp up from 237.5bp, and a €25m seven-year revolver at 200bp. There is also a €62.5m nine-and-a-half-year second lien loan.