The deal was led by bookrunners Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs, Citi, PNC, and KeyBanc Capital Markets. Existing unsecured ratings are BB–/B1.
The borrower intends to use the proceeds from the new print, along with up to $50 million of borrowings under its credit facility and cash on hand, to redeem its $525 million of existing 9.5% notes due 2023. Proceeds may also be used for general corporate purposes.
Analysts at S&P Global Ratings expect that, post today’s transaction, GCP Applied’s debt levels represent roughly a 50% reduction in book debt, compared with June 2017 levels. This is also partly due to the company paying down its debt with a portion of the proceeds from the $1.05 billion sale of its Darex Packaging Technologies segment to Henkel, completed in July 2017.
In August 2016, GCP completed a $275 million repriced B term loan (L+325, 0.75% LIBOR floor).
Structure for today’s pitch includes an issuer-friendly first call, at par plus 50% of the coupon. The equity clawback will be for up to 40% at par, plus the coupon during the non-call period.
Cambridge, Mass.–based GCP Applied Technologies produces and sells specialty construction chemicals and specialty building materials worldwide. — Jakema Lewis
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