Daily News: September 29, 2017

Wells Fargo, BofA Agent New Facilities for Tronox Totaling $2B


Tronox closed a $1.5 billion first lien term loan credit facility and a $500 million asset-based revolving syndicated facility.

According to a related 8-K filing, Wells Fargo was administrative agent for the ABL, and Bank of America was administrative agent for the term loan.

Pursuant to the new term loan, the company’s wholly owned subsidiaries Tronox Finance and Tronox Blocked Borrower borrowed $2.15 billion of first lien term loans. Pursuant to the new ABL facility, the lenders have agreed to make available up to $550 million of revolving credit loans and letters of credit to one or more of the company’s wholly owned subsidiaries in the U.S., Australia and the Netherlands.

The ABL facility provides the ABL borrowers with an aggregate commitment of up to $550 million principal amount for revolving credit loans, with a sublimit of $85 million for letters of credit. The ABL facility includes an accordion feature whereby the total credit available to the ABL Borrowers may be increased by up to $250 million subject to receiving additional lender commitments and the satisfaction of certain other conditions.

In addition to serving as administrative agent, Wells Fargo Bank was issuing bank, swingline lender and collateral agent and Australian security trustee for the ABL. Bank of America and Citibank were co-syndication agents. Goldman Sachs USA was documentation agents.
Wells Fargo Bank, Citigroup Global Markets, Goldman Sachs Bank and Bank of America were joint lead arrangers and bookrunners.

The term loan made available to the Blocked Borrower is required to remain in a segregated blocked account and may become available to the company in connection with its consummation of the previously announced acquisition of The National Titanium Dioxide Company. The term loan facility permits the term loan borrower to incur one or more incremental or additional credit facilities under the facility or otherwise (including as revolving credit loans or notes), of up to the greater of $700 million and 100% of the company’s consolidated EBITDA, plus certain additional amounts based upon, among other things, the applicable net leverage ratio of the company at the relevant time and depending upon whether such additional amounts would be secured pari passu or on a junior or unsecured basis.

In addition to serving as administrative agent for the term loan, Bank of America was collateral agent and joined Citigroup Global Markets, Goldman Sachs, Wells Fargo Securities, RBC Capital Markets, Credit Suisse Securities and Barclays Bank as lead arranger and joint bookrunner.

“This refinancing lowers our overall cost of debt, extends our debt portfolio’s weighted average years to maturity, improves our mix of secured and unsecured debt, and provides additional pay down flexibility,” said Tim Carlson, senior vice president and chief financial officer.

“We believe we are now well-positioned to not only complete the transformational combination of Tronox and Cristal’s TiO2 business but also, following closing, to rapidly deleverage our balance sheet as a result of the substantial free cash flow we believe our combination will generate.”

Tronox is a vertically integrated mining and inorganic chemical business.