Westlake Chemical offers to swap out Axiall notes for planned buyout

By Susanna Moon

Chicago, Aug. 8 – Westlake Chemical Corp. began an exchange offer and consent solicitation for two series of notes related to the proposed acquisition of Axiall Corp.

The company is offering to issue new notes with the same coupon and maturity in exchange for any and all of the following series, according to a company announcement:

• $688 million of outstanding 4.625% senior notes due Feb. 15, 2021 issued by Eagle Spinco Inc., a wholly owned subsidiary of Axiall; and

• $450 million of outstanding 4.875% senior notes due May 15, 2023 issued by Axiall.

The total exchange value will be par of $1,000 principal amount of notes plus $2.50 cash, which includes an early tender premium of $30 of new notes per $1,000 of notes tendered by 5 p.m. ET on Aug. 19, the early participation date.

Those who tender after the early deadline will receive the total exchange value less the early premium.

The exchange will be open to holders until 11:59 p.m. ET on Sept. 2.

Tendered notes may be withdrawn at any time before the supplemental indenture to that note series is implemented.

Westlake said it plans to issue the new Westlake notes “promptly” on or about the second business day after the offer ends.

Along with the tender, Axiall also is soliciting consents to amend the notes to eliminate some covenants, restrictive provisions and events of default.

Even if the holders of at least a majority of the notes do not consent to the proposed amendments, the existing Axiall indentures include provisions automatically terminating many of the restrictive covenants upon the receipt of an investment-grade rating from both Moody’s Investors Service and S&P, the release noted.

Holders who tender their notes will be deemed to consent to the proposed amendments, and they may not give consents without tendering their notes.

The offers are open to holders who are qualified institutional buyers under Rule 144A and Regulation S.

Global Bondholder Services Corp. (866 924-2200, 212 430-3774 or gbsc-usa.com/eligibility/Westlake) is the exchange agent and information agent.

The conditions to the offer include closing of the proposed merger between Axiall, Westlake and Lagoon Merger Sub, Inc., a wholly owned subsidiary of Westlake, with Axiall surviving as a wholly owned subsidiary of Westlake, the completion of financing and the establishment of a credit facility as well as the receipt of consents for at least a majority of the outstanding principal amount of each series of Axiall notes.

The merger is not subject to a financing condition or completion of the exchange.

Westlake is a manufacturer and supplier of petrochemicals, polymers and building products and is based in Houston.

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