LONDON, Dec 11 - German chemicals distributor Brenntag made concessions to investors to secure a loan waiver that will allow its planned initial public offering (IPO) to proceed, a banker close to the deal said.
Brenntag initially offered to increase the interest margin on the senior debt by 175 basis points (bps) to around 350 bps over EURIBOR, while the second lien margin was increased to 400-575 bps. [ID:nLK628171]
The proposals to amend Brenntag's 2.5 billion euro ($3.68 billion) leveraged loan were boosted after initial pushback from investors, who demanded more concessions to keep the company's existing loans in place after the IPO.
The firm added a further 25 bps to the interest margins and fees on the senior and second lien loans to pass the loan changes, bringing the senior margin to around 375 bps and the second lien to 425-600 bps.
Nobody at Brenntag or BC Partners could immediately be reached for comment.
The loan amendment puts the company on track to tap the equity markets when conditions are right.
Sources earlier told Reuters private equity sponsor BC Partners [BCPRT.UL] had hired Deutsche Bank, Goldman Sachs, JP Morgan and Merrill Lynch to manage the offering, planned for the first half of 2010. [ID:nGEE5BA0YP]
BC Partners could be looking to raise up to 1.5 billion euros from the flotation, with a view to retaining less than 50 percent of the group. [ID:nLM244316]
The IPO will repay Brenntag's mezzanine loan, which will reduce leverage from the current 3.6 times to under three times, a banker said, and Brenntag will ask lenders to repay its second lien loan with proceeds from further equity offers if leverage drops below 2.75 times. (Editing by David Holmes) ($1=.6790 Euro)