Huntsman Intl. tapped the loan market last Wednesday for its first covenant-lite term loan. Deutsche Bank and Credit Suisse are leads, with Citigroup as the joint bookrunner. The financing consists of a new covenant-lite, $1.64 billion term loan priced at LIBOR plus 1 3/4%. An existing $650 million revolver is being amended to have one maintenance covenant a 3.75 times total leverage test.
"We're in it, but not sure we like a chemical company that's covenant lite," said one portfolio manager. "They have been covenanted for some time." But another investor was less ruffled, seeing the covenant-lite structure as just a reflection of the market. "I think they are just doing it because they can," he said.
The new proposal calls for making the term loan due now in 2014 it was previously due in 2012. The revolver remains due in 2010.
Standard & Poor's assigned a BB rating to the amended and restated loans, one notch higher than the company's corporate rating. Huntsman officials were out of the office and could not immediately comment on the financing.