Olin Corporation, the parent of Winchester, announced the execution of an amendment to its existing credit agreement, which increased the term loan facility by $315 million, with a delayed-draw feature and lowered the pricing tiers for borrowings under the credit agreement.
Olin also announced that it has notified bondholders that it intends to redeem $315 million of outstanding 10 percent senior notes due October 15, 2025. The notes are expected to be redeemed on March 31, 2021 at a redemption price in cash of 105 percent of the principal amount of the notes (representing an aggregate redemption premium of approximately $15.8 million). The notes were issued in connection with the 2015 Dow Chlorine Products acquisition. Olin expects to fund the redemption using the $315 million incremental delayed-draw term loan and cash on hand.
“We are pleased with the results of the Third Amendment, as it lowers our interest rate on bank borrowings and accelerates the refinancing of a meaningful portion of the remaining $500 million of high-cost acquisition bonds. These actions are expected to reduce annual interest expense by approximately $30 million,” said Scott Sutton, president and chief executive officer, “During the remainder of 2021, we expect to use the excess cash flow generated to redeem the remaining $185 million 10 percent senior notes, as we expect our net debt to adjusted EBITDA ratio to improve to the 3 times range within the next 12 months.”
Photo courtesy Olin Corp./Winchester
