Essar Steel ups spread on $350 million term loan to Libor plus 550 bps

By Sara Rosenberg

New York, Oct. 28 – Essar Steel Algoma increased pricing on its $350 million 4¾-year first-lien term loan B (Ba3/B+) to Libor plus 550 basis points from talk of Libor plus 475 bps to 500 bps, according to a market source.

Also, the original issue discount on the term loan B widened to 98 from 99, the source said.

The term loan B still has a 1% Libor floor.

Deutsche Bank Securities Inc., Goldman Sachs Bank USA and Jefferies Finance LLC are the bookrunners on the deal.

Proceeds will be used to help refinance the company’s capital structure.

Other funds for the refinancing will come from $350 million of senior secured notes and $275 million of junior secured notes.

Essar Steel is a Sault Ste. Marie, Ont.-based manufacturer of hot and cold rolled steel products.

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