Banks have launched a debt sale exceeding $2 billion for BASF SE's automotive coatings division, as the German chemicals giant advances the divestment of its paint and finishing business. The loan sale comes amid a challenging environment for the chemicals sector.

BASF's Coatings division produces automotive paints, industrial coatings and surface treatments for automakers worldwide. The transaction represents one of the largest chemical industry divestments this year, testing investor appetite for specialty materials assets during a period of subdued manufacturing demand.

The deal structure highlights how private equity sponsors are financing large buyouts with significant leverage, even as the broader chemicals industry grapples with overcapacity and weak demand from key customers in automotive and construction sectors.