Altadia prices €1.2B buyout loan; terms

The €1.2 billion term loan backing Carlyle's buyout of Altadia priced late on Feb. 17 in line with revised talk at E+475 with a 0% floor, offered at 98.5. Credit Suisse and Morgan Stanley led a group as physical bookrunners.

Final pricing gives a yield of 5.11% and compares with guidance given at launch of E+425-450 with a 0% floor, offered at 99.5. The deal features a margin ratchet that gives two step-downs of 25 basis points at 0.75x and 1x inside opening leverage. Ticking fees start at 50% of the margin from day 46, moving to the full margin from day 91. Revisions given on Feb. 16 also brought some changes to the documents.

Ratings are B/B2 (issue and issuer), with a stable outlook on both sides and a 3 recovery rating. A €175 million revolver rounds out the debt. BofA Securities, BBVA, BNP Paribas, Citi, Goldman Sachs, Mizuho and Santander comprise the full bookrunner group.

Carlyle announced its acquisition of Altadia, formerly known as Esmalglass SAU, from Lone Star in December 2021.

In response to the final terms, sources said pricing reflects both Altadia's credit story and the widening market.

The tile-coatings group is an existing credit and has a strong market position and growth profile, especially after the acquisition of Ferro's tile-coating business announced at the end of 2019 for an initial payment of $460 million in cash.

Capex needs will eat up a good deal of cash generation for 2022, rating agencies note, which in turn will limit initial deleveraging from the starting multiple of roughly 5x, accounts add. Free cash flow should step up from 2023 while the firm's ability to pass on rising costs from raw materials and energy to customers also supports its credit story. That all said, sources further note the deal has to stack up against opportunities in a secondary market where prices have widened considerably over the past fortnight, with the average bid in the S&P European Leveraged Loan Index now quoted at levels last seen almost exactly a year ago in February 2021.

The deal exits Lone Star from an investment dating from 2017, when it bought the group backed by a €375 million term loan B. Altadia was most recently in the market with a €270 million term loan add-on in July 2021 to fund a shareholder dividend.

Headquartered in Castellon, Spain, Altadia is the largest global manufacturer of colors and glazes for the ceramic sector, employing more than 3,600 people across 19 countries.

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