Platform Specialty Products, a global specialty chemicals company, completed the repricing, extension and amendment of certain existing term loans under its credit agreement.
This refinancing, by creating a new $1,475 million B-4 tranche of term loans and a new €433 million ($476.24 million) C-3 Euro tranche of term loans, extended the maturity date of existing term loan tranches USD B-1, USD B-2 and EUR C-1, representing more than half of Platform’s existing term loan debt, by another three years from 2020 to 2023.
The amendment also shifted $165 million from the USD term loans to the Euro term loans allowing Platform to optimize its foreign currency exposure. This repricing resulted in a 50 basis points reduction in the interest rate (to 4.00% per annum plus the applicable LIBOR rate) for the new USD tranche and 75 basis points reduction (to 3.75% plus the applicable EURIBOR rate) for the new Euro tranche, each as calculated as set forth in the credit agreement.
Commenting on the amendment, Rakesh Sachdev, Platform’s chief executive officer stated, “We are pleased with the confidence the debt market has placed in Platform which reflects significant strides in recent months to improve our balance sheet. This amendment provides us with further capital planning flexibility by extending these term loans by another three years. Additionally, the reduction in interest rates is expected to result in annual interest savings of approximately $11 million, creating additional operating cash flow for the company. We remain committed to further improving our balance sheet in a way that is friendly for all stakeholders.”
To effect the refinancing, the proceeds of the newly-created term loan tranches were used to concurrently prepay in full the existing term loan tranches USD B-1, USD B-2 and EUR C-1, which were not subject to a call premium. The extended maturity date of the new term loans is June 7, 2023 (from June 7, 2020 originally). However, in the event that Platform has not refinanced in full its 6.50% USD senior notes due February 2022 by November 2, 2021 in accordance with the terms of its credit agreement, the maturity date of the new term loans will become November 2, 2021.
Barclays, Credit Suisse, Citibank and Nomura acted as joint lead arrangers.