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Materis Gets 1.9 Billion-Euro Loan Extension From 91% of Lenders

Materis SA, the French building materials supplier, won consent from 91 percent of its lenders to extend maturities and reset terms on about 1.9 billion euros ($2.4 billion) of debt that funded its buyout in 2007.

Materis, owned by private-equity firm Wendel, paid extension fees, increased the interest on senior loans and injected 25 million euros of equity to gain creditors’ approval, according to an e-mailed statement from Paris-based Wendel. It also got permission to sell as much as 700 million euros of high-yield bonds to refinance debt.

Materis will pay interest of 4.5 percentage points, or 450 basis points, more than the euro interbank offered rate on about 1.6 billion euros of senior loans maturing in 2016, which were previously due in 2013, 2014 and 2015, Wendel said. Creditors will get extension fees of 25 basis points to 75 basis points.

The senior loan interest margin drops to 4 percentage points if the company’s debt falls to less than 4.25 times earnings before interest, tax, depreciation and amortization, according to a person with knowledge of the transaction. A proposal in October set the ratio at 4.75 times.

Wendel will add at least 25 million euros to a working capital facility that may be increased to as much as 50 million euros in 2013 under certain conditions, the company said. The facility will be repaid if any of Materis’s four subsidiaries are sold. BNP Paribas SA and Rothschild have been hired to conduct a strategic review and possible sale of the units, Wendel said.

Materis also lengthened the maturities of its 422 million euros of mezzanine debt to December 2016, according to the statement.

Wendel bought Materis for about 2 billion euros in 2006, with lenders led by BNP Paribas SA providing 1.97 billion euros of loans, according to data compiled by Bloomberg. Wendel and Materis’s managers had to inject 45 million euros of cash in 2009 as part of a debt restructuring.

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