Rentech gets $35 million revolver, $100 million multiple draw loan

By Susanna Moon

Chicago, Feb. 29 - Rentech Nitrogen Partners, LP said its wholly owned subsidiary Rentech Nitrogen, LLC closed a $135 million five-year senior secured credit facility at Libor plus 375 basis points.

The credit facility consists of a $35 million revolving working capital facility and a $100 million multiple draw term loan to finance capital expenditures related to the ammonia production and storage capacity expansion under way, according to a company press release.

Rentech Nitrogen Partners is the guarantor of the credit facility, and the credit facility is secured by substantially all of the assets of the company and the partnership.

The facility matures on Feb. 27, 2017.

The capital expenditures facility may be drawn until Feb. 27, 2014 to fund expansion-related expenses and requires amortization payments expected to begin in spring of 2014. In the first two years of amortization 10% per year, or 2.5% per quarter, of the principal outstanding on the capital expenditures facility must be repaid, and in the final year of amortization 25%, or 6.25% per quarter, must be repaid, with the final principal payment due upon maturity.

The working capital facility is available for draws until the maturity date and includes a $10 million letter-of-credit sub-limit. The facility replaces the company's $25 million working capital facility set up in November 2011. It is currently undrawn.

At closing, Rentech terminated the $40 million bridge loan facility provided by Rentech, Inc., which was put in place in December to fund the expansion project in the meantime. The company has drawn about $8.5 million of the capital expenditures facility to repay outstanding principal under the bridge loan facility and to pay fees.

This year, the company said it expects to have an average outstanding balance of $30 to $35 million under the capital expenditures facility. The expansion project is currently projected to generate a return on investment in excess of 20%, given the current environment and expectations for pricing of products and costs of natural gas, according to the release.

The demand during the syndication process allowed the company to expand its working capital facility for additional financial flexibility and reflects the "favorable long-term industry fundamentals for fertilizer demand and low natural gas costs," Dan Cohrs, Rentech Nitrogen's chief financial officer, said in the release.

Rentech is a Los Angeles-based provider of clean energy services and nitrogen fertilizer.

© 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.