Bloomberg News

inc loan

February 05, 2013

Carlyle Group LP (CG:US) is seeking to lower the rate it will pay on a $2.3 billion covenant-lite term loan the private-equity firm obtained about two weeks ago to back its purchase of DuPont Co. (DD:US)’s auto-paint unit, according to a person with knowledge of the transaction.

The interest on the debt maturing in February 2019 will be reduced to 3 percentage points more than the London interbank offered rate and will be sold at par, said the person, who asked not to be identified because the information is private. Libor, a rate banks say they can borrow in dollars from each other, will have a 1 percent floor.

Lenders are being offered six months of soft-call protection of 101 cents, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first six months.

Leverage, or debt to earnings before interest, taxes, depreciation and amortization, will be 4.5 times on a senior secured basis and 5.6 times total, the data show. The debt is rated B1 by Moody’s Investors Service and B+ by Standard & Poor’s.

Barclays Plc is arranging the transaction and commitments are due Feb. 8 by noon in New York, according to the person.

The company’s existing term loan pays interest at 3.5 percentage points more than Libor, with a 1.25 percent floor, according to data compiled by Bloomberg. The debt was first sold to investors on Jan. 17 at 99 cents on the dollar and was quoted at 101.625 cents today, according to prices compiled by Bloomberg.

Unchanged Portion

There will be no changes to the 400 million ($543 million) euro-denominated covenant-lite term loan or to the $400 million revolving line of credit Carlyle obtained to finance the acquisition, according to the person.

The euro-denominated term piece pays interest at 4 percentage points more than Libor with a 1.25 percent minimum on the lending benchmark, while the revolver pays 3.5 percentage points more than Libor, Bloomberg data show.

Carlyle Group, the world’s second-largest private-equity firm, acquired DuPont Performance Coatings for $4.9 billion, the data show.

Randall Whitestone, a spokesman for Carlyle Group, didn’t immediately respond to an e-mail seeking comment.

Blackstone Group LP is the world’s largest private-equity firm.

To contact the reporter on this story: 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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Companies Mentioned

  • CG
    (Carlyle Group LP/The)
    • $28.63 USD
    • -0.42
    • -1.47%
  • DD
    (EI du Pont de Nemours & Co)
    • $71.4 USD
    • -0.07
    • -0.1%
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