Olin obtains $600 million of term loans in anticipation of merger

By Wendy Van Sickle

Columbus, Ohio, Aug. 25 – Olin Corp. entered into a $600 million term loan facility agreement on Wednesday in anticipation of the planned combination of its business with Dow Chemical Co.’s chlorine products business, according to an 8-K filed with the Securities and Exchange Commission.

Borrowings will bear interest at Libor plus 100 to 175 basis points, based on the company’s leverage ratio.

The term loans will be available upon consummation of the proposed merger. The commitments will be terminated if the transaction does not occur by Dec. 26, subject to extension to March 26, 2016 if the closing has been extended in order to obtain antitrust approvals or because of an injunction that makes the consummation of the transactions illegal. The facility is expected to mature three years after the closing date.

Sumitomo Mitsui Banking Corp. is the arranger, bookrunner and administrative and syndication agent in the deal.

Proceeds of the facility may be used to refinance debt outstanding under the existing credit agreement of Dow-Mitsui Chlor-Alkali LLC, to pay fees and expenses in connection with the transactions and for general corporate purposes.

After entering into the credit agreement, Olin was able to reduce its bridge loan commitments by $600 million.

As previously reported, under the planned merger Dow Chemical will separate its chlorine business and combine it with Olin in a transaction valued at about $5 billion.

The deal is structured as a Reverse Morris Trust transaction in which Olin will pay $2 billion of cash and cash equivalents to Dow. It also includes $2.2 billion of Olin common stock and the assumption of pension and other liabilities.

Dow Chemical is a Midland, Mich.-based specialty chemicals company. Its chlorine products business includes its U.S. chlor alkali and vinyl, global epoxy and global chlorinated organics business.

Based in Clayton, Mo., Olin’s three main business segments are chlor alkali products, chemical distribution and Winchester, which produces ammunition.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.