Syndication of the EURO825 million leveraged recap facility for Xerium is proceeding well, via mandated arrangers CIBC World Markets and Morgan Stanley.
The Apax Partners-backed paper making machine parts company, which was formerly known as BTR Paper, has performed well since its buyout in 1999. Apax put Xerium on the auction block in April, and JP Morgan Partners and GTCR Golder Rauner were competing for the business with a potential $1 billion bid. However, the sponsor abandoned a secondary buyout in early October in favour of this recapitalisation.
The facility comprises a EURO350 million seven-year term loan A at 225bp over Euribor, a EURO150 million eight-year term loan B at 275bp, a EURO150 million nine-year term loan C at 325bp and a EURO50 million seven-year revolving credit at 225bp over Euribor with a 75bp commitment fee.
There is also a EURO125 million tranche of 10-year warrant-less mezzanine, and leveraged bankers have commented that, at 11 per cent, the pricing on this tranche is aggressive.
Co-lead arrangers are invited to commit EURO100 million to the senior debt and/or EURO10 million on the mezzanine, although at least one existing lender has already declined to participate in the mezzanine.
The company was last seen tapping the loan market in May, when CIBC arranged a $67.5 million senior debt add-on, which was used to repay a $67.5 million subordinated debt tranche from the company’s buyout in November 1999. That add-on to the B and C tranches of the original senior debt was successfully sold to the existing syndicate.