Iowa Fertilizer solicits consents, waivers from 2013 bondholders

By Marisa Wong

Morgantown, W.Va., May 26 – Iowa Fertilizer Co. LLC is seeking consents and waivers from holders of its Midwestern disaster area revenue bonds, series 2013, issued through the Iowa Finance Authority, according to a notice.

The company is soliciting consents in connection with, among other things, the debt service payment on the bonds on June 1 and the settlement of some outstanding claims with the engineering, procurement and construction (EPC) contractor, Orascom E&C USA Inc.

Iowa Fertilizer’s ultimate parent, OCI NV, has made up to $410 million of subordinate loans to the company to cover the costs of completing construction on a nitrogen fertilizer plant in Lee County, Iowa, including supporting the payment of debt service on the 2013 bonds on Dec. 1, 2016 if other funds are insufficient.

The company and the EPC contractor entered into agreements to settle the claims by the EPC contractor against the company and incentivize the contractor to accelerate the completion of the construction project.

As a result, the company is asking bondholders to consent to a settlement and acceleration agreement, an amendment to the contract between the company and the EPC contractor and an amendment to the bond financing agreement between the bond issuer and the company.

The amendment to the bond financing agreement would amend the definition of additional senior obligations to allow the company to refund the Dec. 1, 2016 and June 1, 2017 sinking fund installments on the 2013 bonds that mature after Dec. 1, 2025.

The company is also asking bondholders to waive some provisions of the bond financing agreement to facilitate the implementation of the contractor agreements.

In addition, the company wants bondholders to waive provisions under the bonds to permit funds on deposit in the debt service reserve fund to be applied to pay debt service on the bonds on June 1.

Holders will also be asked to consent to a waiver of the 60-day notice period required for amendments to the bond financing agreement.

The consent solicitation will expire at noon ET on May 31.

The amendments and waivers require consents from holders of a majority in principal amount of the outstanding bonds.

Holders of record as of May 17 are eligible to participate.

Citigroup Global Markets Inc. is the dealer manager for the consent solicitation. Globic Advisors is the information and tabulation agent.

UMB Bank, NA is the trustee for the 2013 bonds.

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