Bloomberg News

Mondrian Said to Set Rate on $500 Million Loan for Equity Stake

June 14, 2011

June 14 (Bloomberg) -- Mondrian Investment Partners set the rate it will pay on a $500 million term loan B to purchase an equity stake, according to two people with knowledge of the matter.

The London-based money manager is proposing to pay 4 percentage points to 4.25 percentage points more than the London interbank offered rate, said the people, who declined to be identified because the terms are private. Libor, the rate banks charge to lend to each other, will have a 1.25 percent floor.

Mondrian may sell the seven-year debt at 99-99.5 cents on the dollar, the people said, reducing proceeds for the borrower and boosting the yield for investors.

Moody’s Investors Service yesterday rated the debt Ba2 and Standard & Poor’s today assigned a BB grade.

Proceeds of the term loan, which is being arranged by Morgan Stanley and Deutsche Bank AG, will purchase the remaining 27.5 percent equity stake held by private-equity firm Hellman & Friedman LLC, according to the ratings companies.

Lenders will get one year of 101 soft-call protection, said the people, meaning that Mondrian would have to pay one cent more than face value to reprice the debt in its first year.

A term loan B is sold mainly to non-bank lenders such as collateralized loan obligations, bank loan mutual funds and hedge funds.

To contact the reporter on this story: Krista Giovacco in New York at kgiovacco1@bloomberg.net

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


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