Polymer Term Loan Breaks

Polymer Group's $410 million term loan broke in the secondary market at 101, as an estimated $30-40 million changed hands.

  • 23 Nov 2005
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Polymer Group's $410 million term loan broke in the secondary market at 101, as an estimated $30-40 million changed hands. Moody's Investors Service assigned a B1 rating to the term loan, which is due in 2012. It also upgraded Polymer's corporate family rating to B1 from B2. Proceeds from the term loan will be used to pay back a $280 million first lien and a $125 million second-lien loan.

The new Citigroup-led term loan is priced at LIBOR plus 2 1/4%. Polymer's previous first-lien loan was priced at LIBOR plus 3 1/4%, while its second lien was priced at LIBOR plus 6 1/4%. A company spokesman said it was able to roll its new credit into a single first-lien term loan because of its delevered balance sheet and increased EBITDA. "We now have a cleaner balance sheet consisting of senior bank debt and equity," said the spokesman.

Polymer, a maker of nonwoven fabrics and hygiene and medical products, emerged from bankruptcy in March 2003. The Moody's upgrade reflects Polymer's efforts to reduce debt, which includes refinancing long-term debt, the exchange of junior notes for preferred shares and common equity and its exchange of $62 million in 16% series A convertible pay-in-kind preferred stock and class A common stock. Moody's also expects the company to increase its cash flow next year from its investments abroad and from the continued demand for its consumer products, which includes disposable diapers.

Polymer's term loan has a first priority lien on most of its domestic assets, including the stock of the Polymer holding company and its subsidiaries as well as by 65% of the stock of its first-tier foreign subsidiaries.

  • 23 Nov 2005

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