Tronox Enters Into New $700 Million Term Loan Financing
Tronox Incorporated announced that it has entered into a new senior secured $700 million term loan facility comprised of a $550 million term loan and a $150 million delayed draw term loan.
Tronox also announced that it has amended its existing asset-based lending revolving facility. The term facility and the revolving facility expressly permit the proposed acquisition of the mineral sands operations of Exxaro Resources Limited, which was announced on September 26, 2011.
Tronox and its wholly owned Netherlands subsidiary are parties to the term facility with Goldman Sachs Bank USA and Deutsche Bank Securities as joint bookrunners. Wells Fargo Capital Finance is the counterparty to the revolving facility. Kirkland & Ellis provided Tronox with legal advice in completing the financings.
Proceeds from the term facility, together with cash-on-hand and certain other facilities including the revolving facility, are expected to refinance Tronox’s senior secured $425 million facility and fund Tronox’s worldwide operations in the near term and following closing of the transaction. These proceeds will also be used to fund Tronox’s cash needs arising from the transaction.
The term facility will bear interest at a base rate plus a margin of 2.25% or an adjusted Eurodollar rate plus a margin of 3.25%. The base rate is subject to a 2% floor and the Eurodollar rate is subject to a 1% floor. Interest will be payable quarterly. The term facility is secured by a senior priority lien on substantially all existing and future property and assets of Tronox and its domestic and certain foreign subsidiaries. This will include, upon the consummation of the transaction, certain assets to be acquired in the transaction.
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