Flender carves out renminbi tranche to leave euro term loan at €965M

The euro term loan backing Carlyle’s buyout of Flender GmbH is now guided as a €965 million term loan B at E+375 with a 0% floor offered at par, following the carve out of an €80 million-equivalent renminbi tranche and tightening of the offer price talk. Commitments are due by noon London time on Jan. 21 via physical bookrunners and MLAs BofA Securities, Deutsche Bank, and UniCredit.

Updated terms suggest a yield of 3.8% on the euro piece, and compare with guidance given at launch of a €1.045 billion TLB at E+375 with a 0% floor at 99.50-99.75. The new renminbi tranche is pari passu with the euro loan and has been privately placed.

Ratings have emerged from all three providers at B+/B1/BB- (issuer) and B+/B1/BB (issue), with recovery ratings of 3 and 2 from S&P Global Ratings and Fitch, respectively.

Carlyle announced the acquisition of Flender from Siemens for €2 billion in a statement at the end of October. In addition to the seven-year term loan, the financing features a €150 million 6.5-year revolver and a €125 million 6.5-year guarantee facility. The term loan has six months of 101 soft-call protection.

RBC, Commerzbank and Goldman Sachs are passive bookrunners and MLAs on the deal, while Bank of China (sole lead China arranger), NH Investment (sole lead Korea arranger), Helaba, MUFG, SEB and SMBC are MLAs.

Flender is the largest supplier of gearboxes for wind turbines outside China, and the term loan features a margin ratchet of 5-10 basis points linked to the power volume of new gearbox installations in wind turbines. BofA Securities and Deutsche Bank are sustainability arrangers.

Flender specializes in mechanical and electrical drive technology, including gearboxes, couplings and generators. The firm posted sales of roughly €2.2 billion in FY'20 and is headquartered in Bocholt, Germany.