Syndication is set to launch this week for the euro-denominated loans backing Bain Capital 's EUR1.4 billion acquisition of Deutsche Bahn 's Brenntag unit. A bank meeting was held last week for the eight-year, $325 million "B" piece, with price talk on the tranche at LIBOR plus 2 3/4%.
The European part of the facility comprises a seven-year EUR335 million "A" loan, an eight-year EUR109.6 million "B", a nine-year EUR124.6 million "C" loan and a nine-and-a-half year EUR60 million "D" loan. Price talk is LIBOR plus 2 3/4% on the European "B" and LIBOR plus 3 1/4% on the "C." All of the tranches are senior secured on the same level, but the "D" is subordinated to the others from a first-loss perspective, a banker said. The facility also includes a EUR180 million mezzanine piece, a EUR150 million acquisition facility and a EUR200 million revolver. The acquisition facility and revolver are undrawn, the banker said.
Goldman Sachs and Citibank lead the deal, while Dresdner Bank , Société Générale , ABN Amro and HypoVereinsbank are mandated lead arrangers but not bookrunners. Goldman is syndicating the dollar-denominated piece in New York while the euro-denominated tranches are being syndicated out of London by Goldman.
Brenntag is Deutsche Bahn's chemical distribution unit. "The big picture credit story is good but a lot of people are talking about covenants being wider and allowing cash flow to come out of it," one loan investor looking into the credit said. "We have to see how much flexibility sponsors have for taking cash out of the company." Another investor said, "It's not an easy deal to do," citing that the chemical industry is a difficult one to lend to.