Omnova extends secured revolver until 2021, sets size at $90 million

By Susanna Moon

Chicago, Aug. 29 – Omnova Solutions Inc. extended its senior secured revolving credit facility to August 2021 from December 2017 and amended the availability to $90 million.

Omnova also has the option to draw another $50 million under the facility by meeting requirements, according to a company notice.

Interest spreads on the loans were reduced by 25 basis points.

At closing, there was no debt under the revolver.

The company said it refinanced its term loan and senior secured revolving credit facility with proceeds of its $350 million seven-year term loan, with interest initially at 5.25%.

As reported Aug. 2, Omnova launched its $350 million term loan B (B1/B+) with price talk of Libor plus 425 basis points with a 1% Libor floor and an original issue discount of 99.

The term loan has 101 soft call protection for six months and a maximum total leverage covenant.

Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, KeyBanc Capital Markets and Jefferies Finance LLC are the bookrunners on the deal.

Proceeds of the new term loan were used to refinance $189 million of term loans and also to redeem its $150 million of 7 7/8% senior notes due 2018.

Omnova said it will issue a call for the 7 7/8% notes on Sept. 2 at par plus accrued interest through the redemption date of Nov. 1.

The refinancing is expected to cut interest expense by about $2 million per year at current interest rates, the company said.

“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.

© 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.