Nalco seeks to refinance debt

NAPERVILLE - Nalco Co., the world's largest provider of industrial water-treatment services, Thursday set price guidance on a $650 million term loan B-1 it's seeking to refinance debt, according to a person familiar with the transaction.

The interest rate will be 3.25 percentage points more than the London interbank offered rate, said the person, who declined to be identified because the talks are private. Libor, the rate banks charge to lend to each other, will have a 1.5 percent floor, the person said. Nalco may issue the seven-year loan at 99.5 cents on the dollar, the person said, reducing proceeds for the borrower and boosting the yield for investors.

Lenders must let Deutsche Bank AG, the bank arranging the financing, know if they will participate in the deal by Sept. 29, the person said. Charlie Pajor, a spokesman for Nalco, didn't immediately return a call seeking comment. Proceeds of the term loan and a $100 million C-1 tranche, along with cash on hand, will repay outstanding portions under an existing B term facility due in November and outstanding debt under a $750 million term loan that was placed in May 2009.