Chemours refi helps balance sheet by cutting interest, reducing debt

By Devika Patel

Knoxville, Tenn., Feb. 12 – Chemours Co. extended the maturity tower, reduced the principal amount of its debt and lowered its annual interest costs through a refinancing last quarter.

“During the fourth quarter we completed the refinancing of our 2023 U.S. dollar bonds,” senior vice president and chief financial officer Sameer Ralhan said on the company’s fourth quarter and year ended Dec. 31, 2020 earnings conference call on Friday.

“We refinanced roughly $900 million of 2023 bonds with issuance of new $800 million 2028 bonds and using approximately $100 million of balance sheet cash.

“The interest rate on the new bonds is 5.75% versus 6.625% on the older bonds.

“As a result, we were able to extend the maturity tower, reduce the principal amount and lower our annual interest costs.

“We continue to be well positioned from a balance sheet and liquidity perspective as the recovery continues,” he said.

As of Dec. 31, 2020, consolidated gross debt was $4.1 billion. Debt, net of $1.1 billion cash, was $3 billion at the end of the year, resulting in a net leverage ratio of approximately 3.4x on a trailing twelve-month adjusted EBITDA basis. Total liquidity was $1.8 billion at year-end.

On Nov. 12, Chemours priced an upsized $800 million issue of eight-year senior notes (B1//B) at par to yield 5¾%.

The issue size increased from $750 million.

The yield printed at the wide end of the 5½% to 5¾% yield talk but at the tight end of the 5¾% to 6% initial guidance.

J.P. Morgan Securities LLC was on the left of a syndicate of bookrunners that also included Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets Corp., Barclays, HSBC Securities (USA) Inc., Deutsche Bank Securities Inc., TD Securities (USA) LLC and BofA Securities Inc.

The Wilmington, Del.-based chemical company earmarked the proceeds to fund the tender offer for its 6 5/8% senior notes due 2023 and to redeem any of those notes not tendered.

Also on Nov. 12, the company announced the tender offer for the 2023 notes.

Chemours commenced a tender offer to purchase for cash any and all of its $907.91 million outstanding 6 5/8% senior notes due May 15, 2023 (Cusip: 163851AB4) and was soliciting consents to proposed amendments to the indenture.

The amendments provided for the shortening of the minimum notice periods under the indenture for the optional redemption of the notes by Chemours.

Holders of notes that were validly tendered and not withdrawn prior to the 5 p.m. ET on Nov. 25 early tender deadline were eligible to receive the total consideration of $1,017.94 per $1,000 of notes, including the early tender payment of $30.00 per $1,000 of notes, plus interest.

Holders who tendered notes after the early tender deadline and on or prior to the expiration date received the tender offer consideration of $987.94, plus interest.

Chemours planned to redeem any notes that remain outstanding at 101.656, plus interest.

The offer and consent solicitation expired at midnight ET on Dec. 10.

On Nov. 25, the company provided the early results of the tender offer.

As of the early tender deadline, the company had received tenders from noteholders representing $781,354,000 of the $907,910,000 outstanding principal amount.

Chemours received enough consents to execute the amendments, which became operative on the early settlement date, Nov. 27.

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