Omnova Solutions (OMN) Announces Completion of Debt Refi; Sees Lower Costs as Result
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.
In a move to reduce costs, extend maturities and improve flexibility, OMNOVA Solutions Inc. (NYSE: OMN) announced the successful refinancing of its term loan facility and senior secured revolving credit facility, and announced the redemption of its 7.875% Senior Notes due 2018 on November 1, 2016. The refinancing is expected to reduce the Company's interest expense by approximately $2.0 million per year at current interest rates.
The amendment to the Company's term loan facility provides for a new 7-year $350 million term loan facility, the proceeds of which will be used to refinance OMNOVA's existing $189 million of term loans and to redeem all $150 million in aggregate principal of the Company's outstanding 7.875% Senior Notes due 2018 on November 1, 2016. Borrowings under the amended Term Loan Credit Facility will initially bear interest at 5.25%.
Concurrently, OMNOVA renewed its senior secured revolving credit facility, extending its termination date from December 2017 to August 2021, and adjusting the amounts available for borrowing to $90 million, with the ability to borrow an additional $50 million upon the satisfaction of certain requirements. Borrowing spreads under the facility have been reduced by 0.25%. At the time of the transaction, OMNOVA had no balances related to its revolving credit facility.
Lastly, following the amendment to its term loan facility, the Company satisfied and discharged its outstanding 7.875% Senior Notes due 2018 in accordance with the terms of the indenture by depositing the outstanding principal amount of the Senior Notes, and accrued but unpaid interest through November 1, 2016, with the Senior Note trustee. The Company anticipates delivering a notice of redemption under the indenture on or about September 2, 2016 to the current holders of Senior Notes for the redemption of all outstanding Senior Notes on November 1, 2016.
"This debt refinancing will provide significant interest savings to OMNOVA and gives us plenty of liquidity to operate our business, while increasing our flexibility to address strategic actions that will allow OMNOVA to grow," said Paul DeSantis, OMNOVA Solutions' Senior Vice President and Chief Financial Officer. "Key provisions include no pre-payment penalties after six months and the ability to increase borrowings with the lender's agreement."
Additional information regarding the refinancing agreements may be found in the Company's 8-K filing with the Securities and Exchange Commission.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- UPDATE: Wabtec (WAB), Faiveley Settle DOJ Merger Challenge with Divestiture - Bloomberg
- Helios and Matheson (HMNY) Enters Zone Loan Amendment; Moves to Lower Conversion Price on Conv. Notes
- St. Jude Medical (STJ) Shareholders Approve Abbott (ABT) Merger
Create E-mail Alert Related CategoriesCorporate News, Hot Corp. News
Related EntitiesEarnings, Definitive Agreement
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!