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Olin aims for 3x leverage ratio after paying down some high-cost debt
By Devika Patel
Knoxville, Tenn., Jan. 29 – Olin Corp. plans to drive its leverage ratio down to 3x by next year after refinancing some of its higher-cost debt in 2020.
“The early redemption of $120 million of high-cost acquisition bonds this month was funded 100% with cash from operations, as was the additional $150 million of bonds repaid last October,” president and chief executive officer Scott M. Sutton said on the company’s fourth quarter and year ended Dec. 31, 2020 earnings conference call on Friday.
“Through a combination of improved adjusted EBITDA, disciplined capital spending and debt reduction, we expect our net debt to adjusted EBITDA ratio to improve to roughly 3x within the next 12 months,” he said.
On Sept. 15, Olin subsidiary Blue Cube Spinco LLC reported that it planned to redeem $600 million of its outstanding 9¾% senior notes due Oct. 15, 2023.
The notes were redeemed on Oct. 15 at a redemption price in cash of 102.438 plus accrued interest.
The redemption was conditioned upon Blue Cube receiving net proceeds of at least $500 million from new debt. Olin said it expected to fund the redemption using its $500 million senior delayed-draw term loan and $114.6 million of cash generated from operations.
“The use of cash to redeem $100 million of the high-cost bonds reflects improved liquidity driven by actions to reduce working capital and capital spending in 2020 and our second half 2020 operating results” Sutton said in a September news release.
“We expect that the redemption will reduce annual interest expense by approximately $40 million,” he stated in the release.
Then, on Dec. 16, Blue Cube reported it would redeem all $120 million of its outstanding 9¾% senior notes due Oct. 15, 2023.
The notes were redeemed on Jan. 15 at a redemption price in cash of 102.438 plus accrued interest.
Olin is a Clayton, Mo.-based manufacturer and distributor of chemical products and a manufacturer of ammunition.
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