By Lisa Kerner
Charlotte, N.C., July 3 - Stepan Co. issued and sold $100 million of fixed-rate senior notes in a private placement on June 27.
The notes will bear interest at 3.86% paid semiannually.
Proceeds will be used to finance Stepan's recent acquisition of the North American polyester resins business of Bayer Material Science, including the production facility and related capital expenditures, and working capital as well as for general corporate purposes.
The notes have a make-whole call option at Treasuries plus 50 basis points. The company must prepay at least 10% of the total principal amount then outstanding in the case of a partial prepayment.
Stepan is required to prepay about $14.3 million principal amount of the notes at par and with payment of a make-whole amount on June 27, 2019 and on each June 27 thereafter to and including June 27, 2024.
On June 27, 2025, the entire unpaid principal amount of the notes is due and payable.
The note purchase agreement requires Stepan to maintain certain financial ratios and covenants, including a debt to total capitalization ratio of less than 60% and an interest coverage ratio of less than 1.75 to 1.
Purchasers include Massachusetts Mutual Life Insurance Co., C.M. Life Insurance Co., Lincoln National Life Insurance Co., Guardian Life Insurance Co. of America, AXA Equitable Life Insurance Co., Horizon Blue Cross Blue Shield of New Jersey and Great-West Life & Annuity Insurance Co.
Northfield, Ill.-based Stepan makes specialty and intermediate chemicals.
| Issuer: | Stepan Co.
|
| Issue: | Senior notes
|
| Amount: | $100 million
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| Maturity: | June 27, 2025
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| Coupon: | 3.86%
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| Call option: | Make-whole at Treasuries plus 50 bps
|
| Settlement date: | June 27
|
| Distribution: | Private placement
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| Purchasers: | Massachusetts Mutual Life Insurance Co., C.M. Life Insurance Co., Lincoln National Life Insurance Co., Guardian Life Insurance Co. of America, AXA Equitable Life Insurance Co., Horizon Blue Cross Blue Shield of New Jersey, Great-West Life & Annuity Insurance Co.
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