TPC Group to launch $150 million ABL revolver, term loan amend/extend on March 25

By Sara Rosenberg

New York, March 18 - TPC Group LLC is scheduled to hold a lenders' meeting on March 25 to launch a new $150 million ABL revolving credit facility and an amend and extend for its existing term loan B debt, according to an 8-K filed with the Securities and Exchange Commission on Thursday.

The four-year revolver is expected to carry pricing that can range from Libor plus 300 basis points to 375 bps based on a performance grid, with initial pricing expected to be Libor plus 350 bps.

There is a $25 million accordion feature.

The revolver includes a springing fixed-charge coverage ratio of 1.10:1 any time availability is less than the greater of 15% of the total commitments and $15 million.

Meanwhile, under the amendment, the company is looking to extend $175 million of its $280 million term loan B to Jan. 2, 2016 from June 2013.

Pricing on the extended term loan B will be Libor plus 350 bps, compared to Libor plus 250 bps currently, and there will be a 1.5% Libor floor.

Also, the amendment would revise pricing on the non-extended term loan B to Libor plus 300 bps from Libor plus 250 bps currently, with no Libor floor.

In addition, the amendment will permit the obtainment of senior secured debt and senior unsecured debt.

The senior secured debt would be used to refinance existing senior secured debt and the unsecured debt could be used as restricted payments, loans, investments, or acquisitions, provided that the senior secured leverage-post transaction is less than 2.0 times and total leverage is less than 4.25 times.

Furthermore, the amendment will revise the restricted payment provision to allow for the possibility of a one-time upstream distribution to its parent company, TPC Group Inc., of roughly $40 million received from a tax refund.

The company's board of directors is considering various alternatives for the distribution, which may include a possible dividend, stock buyback, acquisitions, capital projects, or other return of capital to stockholders.

Commitments towards the term loan B extension are due on March 30 and commitments towards the new revolver are due on April 6.

Lenders will be paid a 10 bps fee for consents whether or not they elect to extend their commitments.

The transactions are expected to close on April 13.

Deutsche Bank is the lead bank on the deal.

TPC is a Houston-based chemicals processor and service provider, whose primary products are butadiene, butene-1, isobutylene, polyisobutylene and fuel products.

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