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Calumet Specialty Products plans to redeem 6˝% notes, issue new notes
By Angela McDaniels
Tacoma, Wash., Sept. 6 – Calumet Specialty Products Partners, LP plans to redeem its 6˝% senior notes due 2021 via a new senior notes offering, a draw on its asset-based loan facility and cash on hand, according to a company news release.
The company amended the ABL facility to increase the borrowing base by about $100 million and said the increased capacity can only be used to help fund the redemption.
Upon the effectiveness of such borrowings under the ABL facility, the fixed assets associated with the company's Great Falls, Mont., refinery would be added to the ABL collateral pool, which previously only included certain receivables and inventory.
The increased borrowing base is available to complete these proposed transactions through Nov. 30.
“The expansion of the ABL facility is a critical step as we work to position Calumet to potentially refinance its 2021 notes in the unsecured bond market. ... With this ABL amendment in place, we will continue to closely monitor the market conditions to identify the most attractive time to execute our refinancing,” executive vice president and chief financial officer D. West Griffin said in the news release.
"If deployed in the near term, we expect that the $100 million of expanded capacity on the revolver, when combined with the $174 million of cash reported at the end of June and the anticipated free cash flow generated by the business, would enable the company to retire the portion of the $810 million of 2021 notes not otherwise refinanced.
“We would expect to refinance the remaining approximately $500 million of 2021 notes and to have approximately $300 million of liquidity before any refinancing fees, which we believe is more than adequate for the company's operations."
Calumet is an Indianapolis-based master limited partnership and a producer of fuel products and specialty hydrocarbon products.
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