Cleveland-based Geo Specialty Chemicals, Inc. is expecting a price flex down on the "B" tranche of its $145 million credit co-arranged by Deutsche Bank and Salomon Smith Barney. George Ahearn, ceo for the chemical manufacturer, noted that the deal blew out within hours of the bank meeting two weeks ago. The $100 million "B" that priced at LIBOR plus 4%, came in three times oversubscribed, said Ahearn, and the $45 million revolver, with a spread of LIBOR plus 3 1/4%, also filled out. He referred further questions on the potential flex down to officials at the lead banks. Ahearn said he was not surprised by the demand for the credit in a liquid market for "B" loans, after an intimate bank meeting.
The banks picked to lead the deal have long-standing relationships with Geo, commented Ahearn. Deutsche Bank previously underwrote a high-yield offering and Salomon has had strong contact with the company, he added. Sponsored by private equity investor firm Charter Oak Capital Partners, the loan is backing the acquisition of the peroxy chemicals business of Hercules Inc. Officials at Deutsche Bank declined to comment. Officials at Salomon Smith Barney did not return calls.