Ineos Quattro will hold a lender call on Jan. 13 to launch a €2.6 billion, dual-currency five-year term loan backing its acquisition of BP's global petrochemicals business and refinance its existing Inovyn term loan. INEOS Styrolution Group GmbH has also launched a consent solicitation on its 2027 bonds, and is amending its outstanding term loan with the same maturity.
The new term loan facility is denominated in dollars and euros, with pricing talked at L/E+325-350. The OID across both currencies is guided at 99-99.5. The euro piece has a 0% floor while the dollar piece has a 0.5% floor, suggesting a yield to maturity of 3.98%-4.30% on the dollars and 3.40%-3.78% on the euros.
The new term loan will carry six months of 101 soft-call protection.
Ineos announced its $5 billion acquisition of BP's asset in June 2020. In total, some €4.6 billion of new debt is expected to back the deal, with a €2 billion high-yield bond offering, split into secured and unsecured debt, to follow. The financing package also included a revolver and Term Loan A, with the firm targeting a BB/Ba rating profile, and a net leverage below 3.5x for 2020. The new issuing entity Ineos Quattro combines Ineos Styrolution, Inovyn and the new BP assets.
Barclays, BNP Paribas, Citi, Goldman Sachs, HSBC and J.P. Morgan are joint global coordinators and bookrunners. J.P. Morgan is lead-left on the dollar piece, while BNP Paribas, Goldman Sachs and J.P. Morgan are joint physical leads on the euro tranche.
BofA Securities, Commerzbank, Credit Suisse, Lloyds, Mizuho, Morgan Stanley, NatWest, ABN Amro, Credit Agricole CIB, Deutsche Bank, ING, Intesa, Santander, Fifth Third and ICBC make up the bookrunning group on the new debt, while KBC and MUFG are MLAs.
New commitments are due by 5 p.m. London time on Jan. 20.
Ineos Styrolution has also launched a consent solicitation process for its 2.25% secured notes due 2027, and is concurrently seeking amendments to the Term Loan B facilities agreement.
The proposed amendments seek to generally align the terms and conditions of the notes with the corresponding provisions in the Restricted Group's term loan and revolving credit facility agreement entered into as of July 31, 2020, as amended on Dec. 21, 2020.
The proposed amendments include modifying the indenture to:
• Amend the treatment of joint ventures in which the Restricted Group holds an interest to better reflect the Restricted Group's current size, scale and corporate structure compared to when the notes were issued, including as a result of the acquisition of the Aromatics and Acetyls Businesses of BP PLC and the contribution of 94.9% of shares of Inovyn Ltd. (in each case on Dec. 31, 2020)
• Facilitate the entry into certain short-term leasing arrangements of precious, semi-precious and other metals
• Align "security principles" with the Restricted Group's other financing documents
• Allow additional time for the preparation of the financial statements for the year ended Dec. 31, 2020, and all three quarters in 2021 up to the end of Sept. 30.
No consent fee is on offer, and the expiry date for the amended notes is 5 p.m. London time on Jan. 18. Barclays, HSBC and J.P. Morgan are solicitation agents.
BNP Paribas, Goldman Sachs and J.P. Morgan are joint global bookrunners on the amendment to the firm's existing dollar- and euro-denominated Term Loan B. The tenor on the existing $202 million and €450 million term loan will be unchanged, with the maturity due in January 2027, while pricing will also not be amended. The dollar debt is priced at L+200 with a 0% floor, while the euro tranche is at E+200 with a 0.5% floor. The euro debt is quoted in the secondary market at 99.365/100, according to sources.
Consents to the loan amendment are due at 5 p.m. London time on Jan. 19.
BP's petrochemical business is focused on aromatics and acetyls. The businesses have interests in manufacturing plants in Asia, Europe and the U.S., and produced 9.7 million tonnes of petrochemicals in 2019. The takeover agreement saw Ineos make an initial $400 million deposit followed by $3.6 billion on closing, and a final $1 billion deferred and payable in three installments in 2021. Ineos Styrolution funded the initial $400 million through a short-term facility provided through a small group of banks.
