Bakelite sets price talk on $485M term loan for M&A; commitments due Feb. 2

A Goldman Sachs-led arranger group has set price talk on the $485 million first-lien term loan for Bakelite Synthetics that will be used to finance the acquisition of the chemicals unit of Georgia-Pacific and to refinance indebtedness at Bakelite, according to sources. Commitments are due by noon ET on Feb. 2.

The seven-year term loan is offered at a spread of 400-425 basis points over the secured overnight financing rate plus a credit spread adjustment, with a 0.5% floor and an original issue discount of 99. The credit spread adjustment will be 10 bps for a one-month rate, 15 bps for a three-month rate and 25 bps for a six-month rate. Lenders are offered six months of 101 soft call protection.

At talk, yield to maturity is approximately 4.76%-5.02%.

There is no ticking fee on the facility for the first 45 days, then the fee is 50% of the margin from days 46-90, stepping to 100% of the margin thereafter.

Additional arrangers on the deal include Deutsche Bank, UBS, Macquarie and Jefferies.

Rating agencies have assigned facility ratings of BB-/B1/BB+, with a 1 recovery rating from S&P Global Ratings. Corporate ratings are B/B1/BB, with a stable outlook from Ratings, Moody's and Fitch. Financing will also include a $100 million asset-based revolving credit facility due 2027, while the business will also be capitalized with $138 million of new equity, according to the report from Ratings.

Bakelite, backed by Black Diamond and Investindustrial, produces phenolic specialty resins and engineered thermoset molding compounds in North America and Europe. Georgia Pacific chemicals produces formaldehyde solutions primarily for the North American market with a focus on wood and industrial resins segments.