UBS, BNP Sell $150M Piece of ED&F Man Term Loan; Lockup Agreement Expected Soon

UBS and BNP sold a $150 million piece of commodities merchant ED&F Man’s $1.3 billion multi-currency secured term loan and RCF before Christmas, sources told Reorg.

A portion of the term loan A traded around 70 and a term loan B portion changed hands in the low teens, sources added.

Following the trade, Deutsche Bank quoted the A tranche at 69/71 on a 1x1 basis and the B tranche at 10/15. It is quoting the super senior borrowing base facility at 83/87 on a 5x5 basis and the RCF at 77/81 on a 2x2 basis.

The company and its lenders are working on a restructuring deal, which is expected to feature an amend and extend of the term loans and RCF and the provision of $300 million in new money from existing lenders in exchange for the elevation of a portion of their debt. The group and its lenders are expected to enter into a lockup agreement soon and implement the deal in the first quarter of 2022.

The group is expected to use an English law scheme of arrangement or a Part 26A restructuring plan, sources told Reorg.

The group's private placement noteholders are assisted by Akin Gump and THM, as was the case with the company’s scheme of arrangement in 2020, sources said.

The group’s bank lenders are working with Teno, while bank lenders are also working with Allen & Overy.

ED&F Man is working with PJT and Freshfields, as previously reported.

The group's 2020 scheme of arrangement saw it narrowly avoid a $1 billion maturity wall. The restructuring provided the company with an additional $300 million of working capital facilities from lenders and extended maturities by two years with a further extension of one year possible under certain conditions.

All scheme creditors - other than those under the group’s $606 million facility due 2020, which was reduced to $335 million - were entitled to convert their scheme liabilities into a new secured term loan or secured term notes. The term loans and notes are subject to the same covenants and have the benefit of the same security package but the pricing structure differs. However, the 2020 scheme of arrangement did not sufficiently address the company’s capital structure, which remains under stress due to thin margins.

The company’s capital structure is below:
 
– Robert Schach, Aurelia Seidlhofer