Celanese to use IPO, new loans to repay bank debt, $756 million in senior notes

By Ted A. Knutson

Washington, Dec. 10 - Celanese Corp. said it will use the $1 billion proceeds it expects from an initial public offering of common stock plus new bank loans to repay $611 million in senior credit facilities, $350 million for a floating rate term loan, and $756 million of senior subordinated notes.

The latest Celanese filing with the Securities and Exchange Commission raises estimated proceeds from the IPO by $250 million from the original $750 million forecast Nov. 3. Celanese is aiming to raise an additional $1.556 billion in borrowings under new senior credit facilities it is seeking to obtain in tandem with the stock offering. There will also be a delayed draw tranche to fund its planned acquisitions of Acetex Corp. and Vinamul Polymers.

Out of the IPO, Celanese said $199 million will go to repay part of the senior discount notes due 2014 issued by the firm's Crystal LLC subsidiary. Crystal issued $853 million principal amount of the notes this past September, $163 million principal amount in 10% series A senior discount notes and $690 million principal amount of 10½% series B senior discount notes.

In addition, $566 million of the IPO take is being earmarked to repay senior subordinated notes of Celanese's BCP Crystal unit.

BCP Crystal issued $1.225 billion principal amount of 9 5/8% dollar-denominated senior subordinated notes and €200 million 10 3/8% senior notes in June and July.

Deutsche Bank AG New York Branch is the administrative agent for the existing credit facilities with Morgan Stanley Senior Funding, Inc., as global coordinator, Deutsche Bank Securities Inc. and Morgan Stanley Senior Funding, Inc., as joint lead arrangers, ABN AMRO Bank NV, Bank of America, NA and General Electric Capital Corp., as documentation agents, and Bayerische Hypo und Vereinsbank AG, Mizuho Corporate Bank, Ltd., The Bank of Nova Scotia, KfW and Commerzbank AG, New York and Cayman Branches, as senior managing agents.

The $350 million floating-rate term loan scheduled to be repaid was borrowed by BCP Cyrstal via Deutsche Bank AG New York Branch as administrative agent, Morgan Stanley Senior Funding, Inc. as global coordinator and Deutsche Bank Securities Inc. and Morgan Stanley Senior Funding, Inc. as joint lead arrangers. Interest is at Libor plus 425 basis points, falling to 350 basis points after completion of a Celanese restructuring.

Celanese said expects the new credit facilities to have terms similar to the existing loans.

IPO and new loan proceeds will also be used to pay a $752 million dividend to Celanese's shareholders.

The Dallas-based chemical company made the latest announcements in an S-1A registration statement with the SEC.

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