Bloomberg News

Evonik Carbon Black to Raise $1.1 Billion From Bonds, Loan

June 06, 2011

(Updates to add credit line in first paragraph.)

June 6 (Bloomberg) -- Evonik Carbon Black, a maker of material used in tires and inks, plans to raise 770 million euros ($1.1 billion) from senior secured bonds and a credit line to fund its buyout by Rhone Capital LLC and Triton Advisers, according to a person familiar with the matter.

Evonik Carbon Black, through Kinove German Bondco GmbH, is selling 600 million euros of seven-year bonds in euros and dollars and will get a $250 million six-year super senior revolving credit, said the person, who declined to be identified because the terms are private.

New York-based Rhone Capital and Triton, a private equity firm investing in the German-speaking and Nordic regions, will put in 321.1 million euros of equity for the transaction, said the person. Evonik Industries AG in Essen, Germany is selling the carbon black unit to concentrate on its chemicals business.

Evonik Carbon Black will pay interest of 400 basis points more than the benchmark lending rate for the credit line if its debt is equal to or more than 3.25 times its earnings before interest, tax, depreciation and amortization, according to the person. The interest margin will fall to as low as 350 basis points if the ratio declines to less than 2.75 times, the person said. A basis point is 0.01 percentage point.

Goldman Sachs Group Inc., UBS AG and Barclays Capital are managing the financing. A U.S. roadshow starts today, while meetings with European investors start June 13, the person said.

The bonds are expected to be rated B2 by Moody’s Investors Service and B by Standard & Poor’s, the person said. High-yield debt is graded below Baa3 by Moody’s and BBB- by S&P.

Officials at Rhone weren’t immediately available to respond to requests for comment outside business hours in New York. Triton officials in Frankfurt didn’t return an e-mail seeking comment.

--Editors: Andrew Reierson, Cecile Gutscher

To contact the reporter on this story: Patricia Kuo in London at pkuo2@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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