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Omnova to call 7 7/8% notes due 2018 at par on Nov. 1 in refinancing
By Susanna Moon
Chicago, Aug. 29 – Omnova Solutions Inc. plans to redeem its $150 million 7 7/8% senior notes due 2018 on Nov. 1 using proceeds of a new term loan as part of a refinancing.
Omnova will issue a call for the notes on Sept. 2 at par plus accrued interest through Nov. 1, according to a company notice.
The company also refinanced its term loan facility and senior secured revolving credit facility in the refinancing, which is expected to cut interest expense by about $2 million per year at current interest rates, the company said.
The company obtained a new $350 million seven-year term loan with proceeds to be used to redeem the 7 7/8% notes and to refinance $189 million of term loans.
Interest on the amended loan is initially 5.25%.
“This debt refinancing will provide significant interest savings to Omnova and gives us plenty of liquidity to operate our business, while increasing our flexibility to address strategic actions that will allow Omnova to grow,” Paul DeSantis, Omnova’s senior vice president and chief financial officer, said in the release.
“Key provisions include no pre-payment penalties after six months and the ability to increase borrowings with the lender’s agreement.”
Omnova is a Beachwood, Ohio-based innovator of performance-enhancing chemistries and surfaces for commercial, industrial and residential end uses.
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