ISP Chemco's $950 million term loan broke in the secondary market at 101 and traded up to 101 1/4. JPMorgan leads the deal, which also consists of a $200 million revolver. The financing will be used to pay off the company's bonds due in 2009 and 2011 and refinance its $450 million of existing credit facilities. Pricing on the term loan was cut to LIBOR plus 1 3/4% from LIBOR plus 2% (CIN, 2/13).
Moody's Investors Service assigned a Ba3 rating to the term loan and the revolver. The rating is a notch lower than the Ba2 rating on its existing credit facilities. This reflects the company's increased secured debt burden. It expects funded debt at ISP Chemco to increase by 38% to $950 million assuming most of the revolver is undrawn. Offsetting the higher debt burden is ISP Chemco's strong market position, diversified chemical products portfolio and strong growth in revenue and operating profits. An ISP Chemco spokesman did not return calls.