Olin, Blue Cube borrow $1.95 billion in term loans, also add revolver

By Wendy Van Sickle

Columbus, Ohio, Oct. 5 – Olin Corp. borrowed $475 million and $600 million in two term loans and Blue Cube Spinco Inc. borrowed $875 million in a term loans on Monday in connection with a merger agreement, according to an 8-K filed with the Securities and Exchange Commission.

The term loans related to the merger of Olin’s business with Dow Chemical Co.’s chlorine products business, which will survive as Blue Cube.

The $875 million term loan was used to make a payment to Dow Chemical related to the merger.

The $475 million was used to refinance indebtedness under Olin’s existing $415 million credit facilities under an agreement dated June 24, 2014 and to pay fees and expenses in connection with the merger. Any proceeds left over may be used for general corporate purposes.

The $875 million and $475 million term loans were combined under a single credit agreement that also provides for a $500 million revolving credit facility, which will be used for general corporate purposes.

Borrowings under the agreement will bear interest at Libor plus 125 basis points to 200 bps, based on performance level. The revolver has a commitment fee of 17.5 bps to 30 bps.

Wells Fargo Securities, LLC, J.P. Morgan Securities LLC, Citigroup Global Markets Inc.,

Bank of America Merrill Lynch and PNC Capital Markets LLC are lead arrangers and bookrunners; Wells Fargo Bank, NA is administrative agent; JPMorgan Chase Bank, NA is syndication agent; and Citibank, NA, Bank of America, NA, PNC Bank, NA, the Bank of Tokyo-Mitsubishi UFJ, Ltd. and Sumitomo Mitsui Banking Corp. are documentation agents.

Sumitomo term loan

Also on Monday, Olin borrowed $600 million in a term loan in entered into on Aug. 25 with Sumitomo Mitsui Banking Corp. as administrative agent. Blue Cube became a guarantor under the $600 million credit agreement.

The proceeds of that term loan were used to refinance the credit agreement governing the existing indebtedness of Dow-Mitsui Chlor-Alkali LLC, which became an indirect subsidiary of Olin upon consummation of the merger. Any proceeds left over may be used for general corporate purposes.

Olin is a Clayton, Mo.-based manufacturer of ammunition, chlorine and sodium hydroxide.

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