Axalta Coating Said to Seek Lower Rate on $2.8 Billion of LoansKrista Giovacco
Axalta Coating Systems, the former auto-paint unit of DuPont Co. that was bought by Carlyle Group LP last year, is seeking to reduce the rate on about $2.8 billion of loans it obtained to support the buyout, according to a person with knowledge of the transaction.
Barclays Plc, Credit Suisse Group Inc., Citigroup Inc., Deutsche Bank AG, Morgan Stanley, UBS AG, Jefferies Group LLC, and Sumitomo Mitsui Banking Corp. are arranging the financing and will host a lender call tomorrow at 9 a.m. in New York, said the person, who asked not to be identified because the deal is private.
The company is taking advantage of unprecedented demand for loans and record issuance to lower its borrowing costs. Investors funneled almost $65 billion into funds that buy leveraged loans last year while more than $586 million of term loans were sold to non-bank lenders, according to data compiled by Bloomberg.
Private-equity firm Carlyle bought the unit from DuPont last year for $4.9 billion, according to a statement at the time. A $2.3 billion term loan that pays interest at 3.5 percentage points more than the London interbank offered rate with a 1.25 percent minimum on the lending benchmark and a 400 million euro ($543 million) term piece that pays interest at 4 percentage points more than the lending benchmark with a 1.25 percent minimum, were obtained to support the leveraged buyout.
Matthew Winokur, vice president of corporate affairs at Philadelphia-based Axalta, didn’t immediately reply to an e-mail seeking comment.