Orion Engineered Carbons reduces revolver to €300 million

By Wendy Van Sickle and Marisa Wong

Columbus, Ohio, Oct. 11 – Orion Engineered Carbons GmbH entered into a 13th amendment on Oct. 6 to its credit agreement originally dated July 25, 2014 with Goldman Sachs Bank USA as administrative agent and UniCredit Bank AG as coordinator, bookrunner and mandated lead arranger and sustainability coordinator, according to an 8-K filing with the Securities and Exchange Commission.

The company obtained €300 million of commitments under an incremental revolving facility which refinanced and replaced the existing revolver and extended the original revolving maturity date so that the revolver will now be repayable on Sept. 24, 2028.

The amendment also increased the interest rate applicable to the revolver and implemented an ESG-linked margin ratchet for the revolver. The interest rate margin now ranges from 165 basis points to 330 bps, depending on the company’s first-lien leverage ratio.

In addition, the company reset the first-lien leverage ratio financial covenant to 4.00 to 1.00.

The renewed credit facility was oversubscribed by 20%, Orion said in a press release.

The company said the reduction, to €300 million from €350 million, was a result of its stronger cash flow.

The company noted that the added pricing feature links facility funding costs to two sustainability goals, which include continuous greenhouse gas intensity reduction and improvement of its annual EcoVadis ESG rating. Under these terms, the interest rate could be reduced by 5 bps if the company achieves both of its targets.

“We are excited that our revolving credit facility has been renewed at this point in time, as it provides flexibility for us to cover working capital needs, if needed. Our goal is to continue to reduce our total net debt and improve our net debt to EBITDA ratio. We have made substantial progress on both of these metrics over the past year,” Jeff Glajch, Orion’s chief financial officer, said in the release.

Orion Engineered is a specialty chemical company that is based in Houston.

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