Lyondell Chemical plans amendment, increasing revolver longevity but decreasing size

By Sara Rosenberg

New York, June 18 - Lyondell Chemical Co. anticipates amending and restating its credit facility during June, according to a filing with the Securities and Exchange Commission. Under the amendment, the maturity date of the revolver will be extended to June 30, 2005 from June 30, 2003 and the size will be reduced to $350 million. In addition, certain financial ratio requirements will be made less restrictive, while certain covenants limiting acquisition and capital expenditures will be more restrictive, the filing said.

At March 31, the company had $621 million outstanding under its term loan E due May 17, 2006, with an interest rate of Libor plus 437.5 basis points and the revolver had an interest rate of Libor plus 350 basis points, according to the SEC filing. Currently, the company pays a commitment fee of 50 basis points on the unused portion of the revolver, however, upon closing of the amendment, the commitment fee will rise to 75 basis points.

Furthermore, the Houston, Tex. chemical company intends to offer 7 million shares of common stock to the public and $275 million of 10-year senior secured notes. Proceeds will be used to prepay about $200 million of the $621 million of outstanding term loans, according to a company press release. Remaining proceeds will be used for general corporate purposes. The credit facility amendment is conditioned on the closing of the stock offering and the application of proceeds as previously described, the SEC filing said.

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