27 Jan, 2022

Cerdia Finanz prints secured notes at 97 to yield 11.297%; terms

Cerdia Finanz GmbH has placed $600 million of 10.5% five-year senior secured notes at talk, according to market sources. Jefferies acted as lead bookrunner for the offering.

Proceeds of the bonds will be used to refinance the company's existing capital structure.

Cerdia, formerly known as Rhodia Acetow Management GmbH, manufactures filter tow and specialty filter tow products, the main component in cigarette filters. The company operates as a subsidiary of BCP VII Jade Topco (Cayman) Ltd.

Structure for the bonds will include a 90% excess cash flow offer at par, with a leverage-based step-down to 75% at 3.5x the consolidated secured debt ratio, and a minimum offer at par of $15 million in the first year and $20 million thereafter with the ability to move $2.5 million from year one to year two, sources noted.

Corporate and assigned issue ratings are B-/B3, with stable outlooks at both S&P Global Ratings and Moody's. Ratings said Jan. 24 that it believes that "this prompt refinancing will enable Cerdia to establish a long-term sustainable capital structure."

Terms:

Issuer Cerdia Finanz GmbH
Ratings B-/B3
Amount $600 million
Issue Senior secured notes (144A/ Reg S for life)
Coupon 10.5%
Price 97
Yield 11.297%
Maturity Feb. 15, 2027
Call Non-call two (first call at 105.250% on Feb. 15, 2024; then 102.625% on Feb. 15, 2025; then par on Feb. 15, 2026, and thereafter)
Trade (date) Jan. 27, 2022
Settle Feb. 7, 2022 (T+7)
Bookrunners JEFF (global coordinator)/Barc/BofA/CS/DB/GS/NatWest/UBS
Price talk 10.5% with 97 original issue discount
Notes Make-whole at T+50 prior to Feb. 15, 2024; up-to-40% equity claw at 110.5% prior to Feb. 15, 2024; change of control put at 101%.