Goldman Sachs is adjusting the terms of a $3.75 billion debt package designed to finance Arclin’s acquisition of DuPont’s Aramids business, shifting towards a greater reliance on bond financing amid volatility in the leveraged loan market. The revised structure, reported by multiple sources, now includes approximately $2.25 billion in leveraged loans, $1 billion in privately placed high-yield bonds, and a $500 million revolving credit facility.
The deal, initially announced in October 2025, will spot Arclin, owned by private equity firm TJC, acquire DuPont’s Aramids unit for around $1.8 billion. The Aramids business produces high-strength fibers used in protective equipment, including body armor and fire-resistant clothing, and the transaction is anticipated to close in the first quarter of 2026.
The move to incorporate a substantial bond component reflects current conditions in leveraged finance, where a weaker loan market has prompted banks to increasingly utilize bond offerings to complete large-scale acquisitions. According to sources familiar with the deal, the initial structure faced challenges due to investor appetite for leveraged loans.
TJC has contributed additional equity to the acquisition, and recently finalized the purchase of adhesive manufacturer Willamette Valley Co. The financing package will as well be used to refinance existing Arclin debt. The blended approach of loans and bonds is becoming increasingly common in private equity-backed transactions as sponsors and lenders navigate market fluctuations.
Goldman Sachs initially structured the financing with a $3 billion term loan, a $250 million delayed-draw term loan (DDTL), and the $500 million revolving credit facility. The DDTL and revolving facility were intended to provide liquidity and flexibility for potential “buy-and-build” acquisitions, while minimizing immediate interest costs and the risk of over-leveraging. The structure also aimed to provide accounting advantages, such as amortized fees and long-term liability classification, to support higher returns on invested capital.
Despite the adjustments, potential challenges remain, including covenant constraints and the need for future refinancing. The deal’s success will depend on Arclin’s ability to integrate the Aramids business and generate sufficient cash flow to service the debt.
