High-grade: Celanese inks $11B bridge commitment for DuPont unit buy

Celanese Corp. disclosed that on Feb. 17 the company entered into a commitment letter with Bank of America providing an $11 billion, 364-day senior unsecured bridge term loan facility in connection with the company's planned $11 billion acquisition of DuPont's Mobility and Materials business, which is expected to close near the end of 2022.

Pricing on the bridge loan is outlined tied to a ratings-based grid and benchmarked to the secured overnight financing rate initially at Sofr+100-162.5, increasing 25 basis points every 90 days, to a cap of Sofr+175-237.5. Based on the borrower's rating profile, pricing would open at Sofr+125. Pricing includes a 10 bps credit spread adjustment. The bridge loan also includes a duration fee of 50 bps that is payable 90 days after closing, with an additional 75 bps payable after 180 days and a further 100 bps payable at 270 days. It also includes a ticking fee of 17.5 bps.

BofA Securities is acting as sole lead arranger and sole bookrunner on the bridge.

The cash consideration of the transaction is expected to be financed with a combination of available cash; the issuance of senior unsecured notes via public or private offerings; borrowing under a new $500 million, 364-day senior unsecured delayed-draw term loan facility; a new $1 billion, five-year senior unsecured delayed-draw term loan facility; and any other term loan facilities.

The acquisition is expected to drive the expansion of free cash flow and swift deleveraging with total debt below 3x EBITDA within two years of closing, according to a Celanese statement.

Celanese operates as a chemical and specialty materials company. Celanese US Holdings LLC, a subsidiary of Celanese Corp., is rated BBB/Baa3.