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BofA, Jefferies & Deutsche Arrange $655MM Term Loan in Nexeo Acquisition

May 20, 2016, 07:24 AM
Filed Under: Distribution

Neon Finance Company LLC, a wholly owned subsidiary of WL Ross Holding Corp., priced and allocated a $655 million senior secured term loan facility associated with its previously announced definitive agreement to acquire Nexeo Solutions Holdings, LLC.  As a result of strong demand, the Term Loan Facility was upsized to $655 million from a previously disclosed size of $630 million. The total amount of debt remains unchanged as the additional proceeds from the Term Loan Facility will be used to reduce borrowings under the previously disclosed senior secured asset-based revolving credit facility (together with the Term Loan Facility, the "Debt Financing"). The Term Loan Facility will mature seven years after the closing date.

Bank of America Merrill Lynch, Jefferies Finance and Deutsche Bank acted as joint lead arrangers and book-running managers on the Term Loan Facility.

The Term Loan Facility will bear interest at a LIBOR rate, subject to a floor of 1.00%, plus an applicable margin of 4.25%, issued with an original issue discount of 0.50%. Initial pricing of the Term Loan Facility was tightened over the course of the syndication process due to an institutional investor order book that was more than two times oversubscribed.

Wilbur L. Ross, Jr., Chairman of WLRH, said, "We are excited by the positive reception Nexeo has received from debt investors demonstrated by the significantly oversubscribed order book and favorable financing terms. It is a true testament to the quality of the business model and the management team."

Proceeds from the Debt Financing are expected to be used to fund a portion of the purchase consideration for the Acquisition. Nexeo Solutions, LLC will assume the obligations under the Debt Financing as the borrower following closing of the Acquisition. Effectiveness of the credit agreement governing the Term Loan Facility is expected to occur in early June 2016 and is subject to certain customary closing conditions.

WL Ross Holding Corp. is a public investment vehicle sponsored by WL Ross Sponsor LLC, an affiliate of WL Ross & Co. LLC, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or assets. 

Nexeo Solutions is a large global chemical and plastics distributor with a centralized business model. With operations worldwide, Nexeo Solutions offers over 27,000 products used in a broad cross-section of industries, including chemicals manufacturing, oil and gas, paints and coatings, automotive, healthcare and personal care. Nexeo Solutions distributes these products in North America, EMEA, and Asia. The Company provides broad logistics capabilities, in-depth market knowledge, dedicated technical expertise and Environmental Services.

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