Mopping the floor

A restructuring of Swiss floor manufacturer Nybron has closed with lenders gaining all of the equity in exchange for a reduction of debt from a total of €450m to €185m.

Under the agreed deal, senior lenders have been given 90% of the preferred equity in the new entity and 77% of the 3.1m new ordinary shares. The balance of the equity has been split between second lien and mezzanine investors.

The deal sees Nybron’s total debt reduced to €185m, made up of €10m in a new revolving facility, €110m in two senior loan facilities, and €65m in second-lien debt. Nybron had been owned by Vestar Capital. The restructuring was forced by unfavourable market conditions as well as Vestar’s decision not to commit further funding for the group.

Nybron’s bank debt is trading at stressed levels following a covenant reset in February 2007, according to market observers in London. That was just 12 months after the business was bought by sponsor Vestar in a secondary buyout from Nordic Capital and Swiss forest products group HIAG.

The Vestar deal was backed by €450m in senior and mezzanine debt, through Credit Suisse, when it was among the first of what became a long line of deals to see a downwards pricing flex.

Senior debt included a €95m seven-year term loan A at 225bp over Libor, an €95m eight-year term loan B at 250bp, a €95m nine-year term loan C at 300bp, a €40m seven-year revolver at 225bp and a €30m seven-year acquisition facility at 225bp.

The €25m 9-1/2-year second-lien tranche paid 500bp and the €70m 10-year mezzanine tranche paid 3.625% cash and 6% PIK.