Celanese US plans to price dollar-denominated notes in three tranches

By William Gullotti

Buffalo, N.Y., Aug. 10 – Celanese Corp. subsidiary Celanese US Holdings LLC intends to price a dollar-denominated offering of senior notes in three parts, according to a 424B2 filing with the Securities and Exchange Commission.

The planned tranches will mature in 2028, 2030 and 2033.

The interest rate for each series may be subject to adjustment, based on certain rating events, namely potential downgrades, increasing the rate by a margin ranging from 25 basis points to 100 bps if the company becomes junk rated.

In a Wednesday press release, S&P Global Ratings warned that there was a one-in-three chance of a downgrade for Celanese within the next 18 months “if tough economic conditions and weaker-than-expected operating performance prevent Celanese from keeping its weighted-average credit measures appropriate for the ratings, such as free operating cash flow (FOCF) to debt over 10%.”

S&P affirmed the BBB- rating on Celanese on Wednesday, but shifted the view to negative.

Each new note tranche will feature a make-whole call option followed by a par call option. Noteholders from any of the three series will also be able to exercise put rights at 101 if a change of control occurs.

BofA Securities Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC are the joint bookrunning managers.

Computershare Trust Co., NA is the trustee.

Counsel to the issuer is provided by Gibson, Dunn & Crutcher LLP and to the underwriters by Paul Hastings LLP.

Proceeds are intended to fund the company’s tender offer to purchase for cash up to $1.75 billion of its outstanding 3.5% senior notes due 2024, 5.9% senior notes due 2024 and 6.05% notes due 2025, as well as repay outstanding debt under its three-year term loan credit agreement due 2025.

As of June 30, approximately $4.25 billion of notes related to the tender offer were outstanding and approximately $750 million remained outstanding under the credit agreement.

Celanese is an Irving, Tex.-based chemical and specialty materials company.

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