Momentive launches $839 million term B at Libor plus 375-400 bps

By Sara Rosenberg

New York, April 2 – Momentive Performance Materials Inc. (MPM Holdings Inc.) launched on Tuesday its $839 million five-year covenant-lite term loan B (B+) with price talk of Libor plus 375 basis points to 400 bps with a 0% Libor floor and an original issue discount of 99, according to a market source.

The term loan has 101 soft call protection for six months and amortization of 1% per annum, the source said.

Incremental allowance is an unlimited amount subject to pro forma first-lien net leverage 0.5 times inside closing first-lien net leverage.

Mandatory prepayments are from 100% of asset sales/recovery events, subject to some carve-outs/exceptions, with leveraged-based step-downs to 50% and 0% at 0.5 times and 1 times leverage inside closing date leverage, respectively; 100% of debt issuance, subject to some carve-outs/exceptions; and 50% excess cash flow sweep with leverage-based step-downs to 25% and 0% at 0.25 times and 0.5 times leverage inside closing date leverage, respectively, the source continued.

Security is a second-priority lien on asset-based lending collateral and a first-priority lien on substantially all present and after acquired tangible and intangible assets and capital stock of the borrower and guarantors, limited to 65% of the capital stock of first tier foreign subsidiaries.

BNP Paribas Securities Corp. and Citigroup Global Markets Inc. are the joint lead arrangers and joint physical bookrunners on the deal. BNP is the administrative agent.

Commitments are due at 5 p.m. ET on April 16, the source added.

Proceeds will be used to help fund the acquisition of the company by SJL Partners LLC, KCC Corp. and Wonik QnC Corp. for $32.50 per share. The transaction is valued at about $3.1 billion, including the assumption of net debt, pension and OPEB liabilities.

Other funds for the acquisition will come from cash.

Closing is expected in the second quarter, subject to regulatory approvals and other customary conditions. The transaction is not subject to any financing contingency.

Momentive is a Waterford, N.Y.-based silicones and advanced materials company. KCC is a Seoul, South Korea-based chemicals manufacturer. Wonik is a Gumi, South Korea-based manufacturer and seller of quartz and ceramic wares used in the production of semiconductor wafers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.