Rentech term loan with Blackstone's GSO lifted by up to $63 million

By Jennifer Chiou

New York, Feb. 17 – Rentech, Inc. announced that it has increased its credit facility through GSO Capital Partners LP, the credit investment arm of Blackstone, by up to $63 million.

According to a news release, the new commitment comes in the form of a two-tranche delayed-draw term loan, which will be available for up to one year.

One tranche of the term loan allows Rentech to borrow up to $45 million. The company has initially borrowed $25 million.

The company said that it expects the $45 million tranche to fund construction, working capital and other costs of its Atikokan and Wawa pellet projects until they generate positive cash flow.

Rentech noted that it may use the remaining commitment of up to $18 million in the event of certain unplanned downtime at the East Dubuque facility or unfavorable changes in commodity prices that affect cash distributions from Rentech Nitrogen Partners.

The term loans mature on April 9, 2019.

Borrowings bear interest at Libor plus 900 basis points with a Libor floor of 1%.

The release stated that Rentech also increased the collateral securing its obligations under its preferred stock holders' existing put option right agreements.

As previously reported, the company entered into a $50 million five-year term loan facility with GSO in April 2014. The loan was issued at an original issue discount of 98 and featured a $75 million accordion feature.

Rentech said it estimates the cost to complete the construction of its Canadian wood pellet projects to be $125 million to $130 million.

Los Angeles-based Rentech owns and operates wood fiber processing, wood pellet production and nitrogen fertilizer manufacturing businesses.

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