The financing backing The Blackstone Group's E3.1 billion acquisition of German chemical company Celanese will include a term loan as well as a three-tranche bridge facility, attracting hedge funds in addition to traditional loan investors. The senior secured tranche will include a E540 million term loan and a E335 million senior bridge "A" facility and may include a E400 million revolver. The subordinated tranches are composed of a E720 million senior subordinated bridge "B" facility and a E565 million senior subordinated bridge "C" loan. The facilities will have a tenor of ten years. The spread on the "B" bridge is expected to be 8%, while the spread on the "C" bridge is expected to be 10%. Both spreads are subject to quarterly increases. Morgan Stanley and Deutsche Bank are leading the facility.
One loan investor noted bridge facilities have become less prevalent in the market due to current conditions. "The markets have been so strong you can go directly to market and lock in a good price," he said. "Why wait? Who knows what the market will be like the next year?" Spokesmen at Morgan Stanley, Deutsche Bank and Blackstone did not return calls.