Alfa Heard Bringing Acquisition Loan

Mexican conglomerate Alfa is understood to have mandated a syndicated loan to back the $600m purchase of Eastman Chemical assets in the US. A $600m 3-year bullet facility is expected to be syndicated next month. Credit Suisse and HSBC are heard as the leads on the deal that hits a LatAm bank market starved for assets and hungry for yield. The purchase of Eastman’s polyethylene terephthalate resins business and related assets and technology of its Performance Polymers segment was done by Alfa unit DAK Americas. BAML advised Eastman while HSBC is understood to have worked on the buyside. Fitch Wednesday downgraded Alfa sub Grupo Petrotemex to BB (stable) from BB+, including notes issued by DAK, amid fears over leverage incurred in the purchase. On a pro forma basis, Fitch estimates that Petrotemex’s total debt-to-Ebitda, considering 12 months of Eastman assets operations, could reach 3.3x in 2010 and gradually decrease. This compares negatively with a total debt-to- Ebitda ratio of 2.2x for the 12 months to June 30, and fall outside Fitch’s prior leverage estimation of 2.0x to 2.5x. Nonetheless, Fitch notes that the investment is strategic and positive for Petrotemex, and should strengthen its business position, as it gains PET market share in North America. “It should also bring potential synergies to Petrotemex’s operations, provide the company with access to new technologies and improve its vertical integration,” says Fitch.