The $1.1 billion "B" loan for Nalco Co. was upsized to $1.3 billion last week, but pricing was also trimmed 25 basis points from LIBOR plus 23/4%. An investor said the $200 million was taken from the bonds, replacing the more expensive subordinated debt with cheaper bank financing. Citigroup, Bank of America, J.P. Morgan, Deutsche Bank, Goldman Sachs and UBS are the lead arrangers on the bank and bond debt financing.
The "B" tranche is part of a bond and bank debt package backing the $4.2 billion purchase of Nalco, a water treatment provider and chemical processor currently owned by French water company Suez, by The Blackstone Group, Apollo Management and Goldman Sachs Capital Partners. Officials at the banks either declined comment or did not return calls. There is also a $300 million "A" loan and a $250 million revolver. The pro rata is priced at LIBOR plus 21/2%.