Asset allocation

Lpc kerneos to raise _505m loan refinancing


´╗┐Nov 30 French aluminates company Kerneos is set to raise a 505m loan to refinance existing debt and repay a vendor loan that was used to finance the company's 2014 buyout by private equity firm Astorg, banking sources said on Wednesday. BNP Paribas and Goldman Sachs are leading the loan financing and a bank meeting is set to take place on Wednesday to show the deal to investors, the sources said. The loan includes a 445m seven-year covenant-lite term loan B, expected to pay 400bp over Euribor with a 0% Euribor floor at 99.5 OID, the sources said.

There is also a 60m six-year revolving credit facility, guided to pay 3.75bp over Euribor.

The loan will refinance Kerneos' 375m senior secured notes, a super senior RCF, and remaining vendor loan that totals around 50m, as well as fees and expenses, the sources said. Lenders have been asked to commit to the deal, which has estimated net leverage of 4.25 times, by December 14.

Earlier this year, Astorg put Kernoes up for sale, hiring investment bank Lazard on the process. A sale could have valued the firm at around 1bn. Paris-based Kerneos makes calcium aluminate cements, used as tile adhesives and furnace insulation among other functions.

Lpc lead banks and pricing on pdos us$34bn loan emerge


´╗┐Details on the lead bank group and pricing for Petroleum Development Oman's (PDO) US$3.4bn, five-year pre-export facility have emerged. Banca IMI, Bank of China, HSBC, ING, JP Morgan, Natixis, National Bank of Abu Dhabi, Societe Generale, Standard Chartered and Sumitomo Mitsui Banking Corporation are leading the deal, with HSBC acting as the sole international financial adviser, one banking source said. The loan pays a margin of 160bp over Libor with all-in fees coming in at 190bp, the banker said. The deal initially went out to the ten lead banks who were asked to commit US$300m each, but it has now gone out to wider syndication following a bank meeting in London on May 27. The deal is expected to close by the end of June.

PDO - which is majority owned by Oman with stakes also held by Royal Dutch Shell, Total and Partex Oil & Gas - is working closely with Oman's Ministry of Finance and Ministry of Oil and Gas to raise the loan to fund its operations as low oil prices continues to impact revenue. The continuation of the low oil price environment is stretching state finances in Gulf countries, with Oman in particular feeling the squeeze as it lacks the huge fiscal reserves of some of its neighbours.

PDO will be a benchmark deal for the sultanate which is looking to raise funds through a number of syndicated loans and its first bond issue in 20 years, which could be as large as US$3bn according to a second banker. Once PDO's loan has closed, state energy investment firm Oman Oil Company is expected to immediately start the refinancing of a US$1.85bn loan originally signed in September 2014.

PDO's deal follows a US$1bn, five-year loan for Oman that closed in January, but only after a protracted syndication. That deal faced difficulty after Standard & Poor's downgraded the country's sovereign debt to BBB+ during syndication in November, which led to pricing on the loan being flexed upwards from 110bp over Libor to 120bp over Libor. With that in mind, lenders wanted the extra security offered by the pre-export financing structure on PDO's new deal, rather than pure Omani sovereign risk. PDO was not immediately available to comment.