Carlyle Said to Seek $2.9 Billion in Loans for DuPont Unit

Carlyle Group LP, the world’s second-largest private equity firm, is seeking $2.9 billion of loans backing its purchase of DuPont Co.’s auto-paint unit, according to a person with knowledge of the transaction.

The financing, which is being arranged for DuPont Performance Coatings Inc., will include a $2.3 billion seven-year term loan, a $200 million seven-year term portion denominated in Euros and a $400 million revolving line of credit that will mature in five years, said the person, who asked not to be identified because the information is private.

The deal is poised to be the largest buyout financing to be raised in the U.S. since Kinetic Concepts Inc. obtained a $2.45 billion loan in November 2011 for its purchase by Apax Partners Inc., according to data compiled by Bloomberg. More than $637 billion of loans were obtained by speculative-grade rated companies in the U.S. in 2012, surpassing levels from the previous year by about 8 percent.

Barclays Plc, Citigroup Inc., Deutsche Bank AG, Credit Suisse Group AG, Morgan Stanley, UBS AG, Jefferies Group Inc. and Sumitomo Mitsui Banking Corp. are arranging the debt, the person said. The banks will meet with lenders Jan. 8 at 10:30 a.m. in New York and Jan. 9 at 12:30 p.m. in London.

Leverage, or debt to earnings before interest, taxes, depreciation and amortization, will be 5.6 times total, said the person. Funds under the the revolving credit line can be obtained in more than one currency, the person said.

Carlyle Group is acquiring the business from Wilmington, Delaware-based DuPont for $4.9 billion with the transaction expected to close during the first quarter, according to an Aug. 30 company statement.

Randall Whitestone, a spokesman for Carlyle Group, and Michael Hanretta, a spokesman for DuPont, declined to comment. Blackstone Group LP is the world’s largest private-equity firm.

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