Trinseo units sign $1.08 billion secured loan; existing loan amended

By Mary-Katherine Stinson

Lexington, Ky., Sept. 8 – Trinseo plc’s indirect wholly owned subsidiaries Trinseo Luxco Finance SPV Sarl and Trinseo NA Finance SPV LLC on Sept. 8 entered a credit agreement providing for a senior secured term loan facility of $1,077,000,000, according to a press release and an 8-K filing with the Securities and Exchange Commission.

The financing was arranged by Angelo, Gordon & Co., LP and Oaktree Capital Management, LP with funds managed by Angelo Gordon, Oaktree and Apollo Global Management, Inc. as lenders.

Trinseo Luxco Sarl, as the parent, and Trinseo NA Finance LLC are the guarantors.

The term loan facility bears interest at term SOFR plus 850 basis points.

The facility matures on May 3, 2028 and amortizes in equal quarterly installments of 0.25% of the initial principal amount, starting Jan. 2, 2024.

There is an option to elect partial payment-in-kind interest for up to 24 months at an annual cash interest rate of SOFR plus 425 bps and a PIK interest rate of 5.25%.

There are also call protections, with prepayment premiums as follows: prior to 18 months from closing at a customary make-whole amount; from 18 months to 30 months from closing at 3%; from 30 month to 42 month from closing at 2%; and after at par.

All mandatory prepayments with the net cash proceeds from the sale of co-borrower’s interest in or with the proceeds of dividends received from Americas Styrenics LLC prior to the 36-month anniversary of the facility are subject to prepayment premiums as follows: prior to the 12 months from closing at a customary make-whole amount; from 12 months to the 24 month from closing at 3%; from the 24 months to 36 months from closing at 2%; and after at par.

Financial covenants require that the company maintain at least $100 million of liquidity at the end of any calendar month and includes a cross default to the company’s existing credit agreement.

Centerview Partners LLC acted as financial adviser and Ropes & Gray LLP acted as legal counsel to Trinseo on this transaction. Paul Hastings LLP acted as legal counsel to Oaktree, Angelo Gordon, and Apollo.

Alter Domus (US) LLC is the administrative agent and collateral agent.

The term loans were used to fund the 2023 term loans totaling $948 million and an intercompany loan and equity contributions of $125 million which were used to fund the voluntary prepayment of the 2018 refinancing term loans and partial redemption of the 2025 senior notes.

Also on closing, Trinseo plc’s indirect wholly owned subsidiaries, Trinseo Materials Operating SCA and Trinseo Materials Finance, Inc., entered into an amendment to the company’s credit agreement dated Sept. 6, 2017.

The borrowers borrowed $948 million of new term loans under a new term loan facility with Trinseo Luxco Finance SPV Sarl as the lender, which was established under the existing agreement.

The term loans bear interest at adjusted term SOFR plus 966 bps.

The facility matures on May 3, 2030 and amortizes in equal quarterly installments of 0.25% of the initial principal amount, beginning for the quarter ending on Dec. 31.

All voluntary prepayments and mandatory prepayments of the loans with the proceeds from non-permitted debt are subject to a yield protection fee as follows: prior to the 18 months from closing at the make-whole amount set out in the existing agreement, from 18 months to 30 months from closing at 17.01%; from 30 months to 42 months from closing at 15.88%; from 42 months to 62 months from closing at 13.6%, and after at 0%.

Deutsche Bank AG New York Branch is the administrative agent and collateral agent.

Proceeds were used, together with cash on hand, to fully repay the outstanding principal amount plus accrued interest on the 2018 refinancing term loans and to redeem $385 million of the borrowers’ 5 3/8% notes due 2025. A conditional notice of redemption was issued on Aug. 10 for the notes.

Trinseo is a Wayne, Pa.-based materials solutions provider and manufacturer of plastics, latex binders and synthetic rubber.

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