Resolution Performance Products to repay bank debt with note sale proceeds, amend loan

By Sara Rosenberg

New York, Dec. 15 - Resolution Performance Products LLC said it plans to repay borrowings under its credit agreement with a portion of the proceeds from a $125 million senior secured notes offering.

In connection with the notes offering, the company is seeking amendments to its credit facility that would allow for the note sale under the condition that proceeds will be used to repay all of the remaining term loans outstanding.

The amendment also would eliminate the adjusted bank leverage ratio covenant and impose an asset coverage test that will limit borrowings and letters of credit under the revolver to the sum of 65% of the net book value of the U.S. inventory, 85% of the net book value of the U.S. receivables and 20% of the net book value of the U.S. plant, property and equipment, according to a filing with the Securities and Exchange Commission.

Remaining proceeds from the bond sale will be used for general corporate purposes, including working capital.

Resolution Performance Products is a Houston-based resin company.

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