Ineos Said to Set Rate on $1 Billion Term Loan to Refinance Bond

Ineos Group Holdings SA, a chemical maker, set the rate it may pay on a $1 billion loan to refinance bonds due in 2015, according to three people with knowledge of the deal.

The debt, due in 2018, will consist of a $570 million portion and a 300 million-euro ($390 million) slice, said the people, who asked not to be identified because the deal is private. The dollar portion may pay interest at 300 basis points to 325 basis points more than benchmarks, while the euro portion may pay a spread of 325 basis points to 350 basis points. A basis point is 0.01 percentage point.

The loan may be sold between 99.5 percent of face value and par and will feature a minimum 1 percent benchmark-rate floor, the people said.

The rate paid on a $1.97 billion covenant-light loan and 497 million-euro debt will be reduced to match the level of the new financing, according to the people.

The margin on the company’s $370 million term loan maturing in 2015 also will be reduced to pay between 225 basis points and 250 basis points and be offered at par, the people said. Investor commitments are due by April 30, they said.

Ineos will have a total leverage ratio of 4.1 times, one of the people said. The measure will be 2.8 times through senior debt. Leverage is the measure of debt to earnings before interest, taxes, depreciation and amortization

Barclays Plc and Bank of America Corp. are joint global coordinators on the deal. Citigroup Inc, Goldman Sachs Group Inc. and UBS AG are bookrunners, the people said.

Ineos, based in Rolle, Switzerland, on April 16 offered to redeem bonds maturing in 2015 and 2016, conditional upon the completion of one or more financings by the company, according to announcements on the Luxembourg stock exchange.

Richard Longden, an Ineos spokesman, wasn’t immediately available to comment after business hours.

Ineos reported first-quarter earnings before interest, taxes, depreciation and amortization of 415 million euros, the company said last week. It had net debt of about 6.5 billion euros.

To contact the reporters on this story: Julie Miecamp in London at jmiecamp@bloomberg.net; Patricia Kuo in London at pkuo2@bloomberg.net; Krista Giovacco in New York at kgiovacco1@bloomberg.net

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

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