Syndication launches this week for the euro-denominated loans backing Bain Capital's E1.4 billion acquisition of Deutsche Bahn's Brenntag unit. A bank meeting was held two weeks ago for the eight-year, $325 million "B" piece, with price talk on the tranche at LIBOR plus 23/4%.
The European part of the facility comprises a seven-year, E335 million "A" loan; an eight-year, E109.6 million "B"; a nine-year, E124.6 million "C" loan and a nine-and-a-half year, E60 million "D" loan. Price talk is LIBOR plus 23/4% on the European "B" and LIBOR plus 31/4% 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 E180 million mezzanine piece, a E150 million acquisition facility and a E200 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.