UBS launched syndication last Wednesday of a $140 million first-lien credit facility to back GSO Capital Partners' acquisition of ArrMaz Custom Chemicals from Wind Point Partners. The deal consists of a six-year, $15 million revolver and a six-year, $125 million first-lien term loan. Price talk is LIBOR plus 2 1/2% on both tranches. There is also a $52.5 million second-lien facility that has been fully subscribed, according to a banker.
Standard & Poor's rated the revolver and term loan B+ with a recovery rating of 1 and rated the second lien CCC+ with a recovery rating of 5. S&P predicts the company's proprietary chemistry, value-added product mix and high degree of technical sales and service should ensure the continuation of good profitability and reasonable cash flow despite the company's high debt leverage. According to an S&P analyst, the company's debt leverage is approximately six times.
ArrMaz produces chemical reagents, additives and coatings for the North American phosphate fertilizer and asphalt industries. Based in Mulberry, Fla., it also provides chemical products to related mineral mining industries. Calls to Robert Brinkman, cfo, were not returned. A representative from GSO could not be reached. A spokeswoman from Wind Point Partners did not return calls.