Cable manufacturer Prysmian, bought out from Pirelli last year by Goldman Sachs Private Equity, has launched its refinancing via joint bookrunners Goldman Sachs, JPMorgan and Lehman Brothers.
The cash elements of the new financing comprise an €360m eight-year term loan B at 250bp and a €90m nine-year term loan C at 300bp, both of which will be offered at par. Proceeds will be used to prepay the €150m of second-lien debt from the original structure and provide a dividend of €225m.
An amendment process will run concurrently, which will seek consent for the second-lien prepayment as well as resetting the deal’s covenants under the terms of the new financial structure. Lenders will receive a 25bp waiver fee.
Although the dividend payment is equal to 100% of the equity component in the original deal, earnings are running 44% ahead of plan, giving an implied equity level which is ahead of the level seen in the original deal, according to the leads.
Total leverage has also dropped to 3.9x, from 4.3x last year. Despite the company’s strong performance, the drop in blended yield means that investors are likely studying this deal’s fundamentals carefully before making their decisions.
The second-lien piece being taken out paid 700bp and received the strongest response in syndication last time around, while the remainder of the original €1.830bn loan received a mixed response to begin with on account of its tight senior pricing, although it concluded syndication fully subscribed.
The earlier deal comprised a €350m seven-year term loan A (split between a €150m amortising loan and a €200m bullet) paying 150bp–225bp over Euribor and structured as a 12-month bridge to a receivables securitisation programme.
There was also a €265m eight-year term loan B at 250bp, a €265m nine-year term loan C at 300bp, a €500m seven-year revolver at 200bp and a €300m seven-year bonding facility at 150bp, and the €150m 9-1/2- year second secured facility at 700bp.