Bloomberg News

Unifrax Said to Cut Rate on $390 Million Financing for Buyout

November 17, 2011

Nov. 16 (Bloomberg) -- Unifrax Corp., a producer of high- temperature insulation products, cut the rate and shifted funds in a $540 million financing backing its buyout by American Securities LLC, according to a person with knowledge of the matter.

A seven-year term loan has been decreased to $390 million and a 75 million euro ($101 million) piece has been added, said the person who declined to be identified, because the deal’s private.

Unifrax, based in Niagara Falls, New York, will pay 5.5 percentage points more than the London interbank offered rate on the dollar denominated debt, compared with six percentage points more than the lending benchmark initially proposed, the person said. The euro-denominated piece will pay six percentage points more than Libor. The lending benchmark will have a 1.5 percent floor on both portions.

The company will sell the loans at 98 cents on the dollar, the person said, reducing proceeds for the borrower and boosting the yield for investors. Unifrax previously offered to sell the loan at 97 cents on the dollar.

Lenders to the Goldman Sachs Group Inc.-led deal are being offered one-year of soft-call protection of 101 cents on both facilities, the person said, meaning Unifrax would have to pay one cent more than face value to reprice the debt during its first year.

The interest rate on a five-year, $50 million revolving line of credit has been cut by 0.5 percentage point, to 5.25 percentage points more than Libor, the person said.

In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t. A term loan B is

--Editors: Faris Khan, Chapin Wright

To contact the reporters on this story: Krista Giovacco in New York at kgiovacco1@bloomberg.net; Michael Amato in New York at mamato3@bloomberg.net

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


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