J.P. Morgan, Bank of Montreal and Goldman Sachs acted as joint bookrunners and joint lead arrangers on a $200 million term loan B facility of seven years for Neenah. J.P. Morgan is the administrative agent on the facility with Bank of Montreal and Goldman Sachs serving as co-syndication agents.
The facility is rated BBB-by S&P Global Ratings and Ba3 by Moody’s Investors Service.
Neenah also is calling its outstanding 2021 notes for redemption in full on July 16, 2020. Proceeds under the new facility will be used to redeem the $175 million of outstanding 5.25% 2021 notes, repay borrowings under the company’s senior secured revolving credit facility and for general corporate purposes. Neenah also amended its global asset-based lending agreement to reduce the revolving credit facility from $225 million to $175 million and make certain other changes related to the refinancing and resizing.
The interest rate under the new facility will be determined based on LIBOR or other published rates, with an expected initial rate of approximately 5%. The term loan credit agreement contains no financial maintenance covenants and includes other customary covenants for agreements of this nature. The facility may be prepaid with a 1% call premium for the first 12 months, after which it may be prepaid, in whole or in part, without premium or penalty.
“We’re extremely pleased with the strong interest and resulting favorable terms for this new credit agreement,” Paul DeSantis, CFO and treasurer of Neenah, said. “The facility supports our strong balance sheet and financial position, and modestly lowers our cash interest rate. Importantly, the structure also provides additional flexibility and will allow Neenah to be well-positioned to resume executing our growth strategies as global economies recover.”
Neenah is a global specialty materials company.