Grohe Holding GmbH, a German maker of bathroom fixtures, increased the size of a loan it’s raising by 75 million euros ($97 million) in response to lender demand, according to a person with direct knowledge of the deal.
The five-year, first-lien term loan, which is split between 175 million-euro and $260 million portions, is being arranged by Credit Suisse Group AG, Deutsche Bank AG and Morgan Stanley, said the person, who declined to be identified as the terms are private. Proceeds will be used to refinance 300 million euros of floating-rate bonds due in 2014, with the additional 75 million partially refinancing the company’s 8.625 percent notes due the same year, the person said.
Grohe is offering to pay interest at 550 basis points more than benchmarks for both portions of the loan, with a 1.25 percent floor on the lending benchmarks, the person said. The euro slice will be sold to investors at 98.5 cents on the euro and the dollar-denominated debt at 99 cents on the dollar, reducing the proceeds for the company and boosting the yield to investors. A basis point is 0.01 percentage point.
Lenders will receive soft-call protection of 101 cents, the person said, meaning that Grohe would have to pay a one cent premium to reprice the debt in its first year.
The borrower has asked European and U.S. lenders to recommit to the loan by 5 p.m. on May 14 London and New York-time respectively, the person said.
Lenders attended bank meetings in London on May 2 and in New York on May 4, said the person. The deadline for commitments was originally today at 5 p.m.
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