Tetra Tech to repay loans with proceeds of convertible notes

By Mary-Katherine Stinson

Lexington, Ky., Aug. 17 – Tetra Tech, Inc. plans to pay the cost of capped call transactions and pay down three of the company’s credit facilities using proceeds from a planned $500 million private placement of convertible senior notes due 2028, according to a notice.

Tetra Tech expects to repay all $185 million principal amount outstanding under its revolving credit facility, up to $234 million principal amount outstanding under its senior secured term loan due 2027 and, with any remaining proceeds, a portion of the $500 million principal amount outstanding under its senior secured term loan due 2026.

Some proceeds will also be used to pay for capped call transactions as part of the convertible bond issuance.

If the initial purchasers exercise the $75 million greenshoe on the convertible notes, Tetra Tech expects to use a portion of the net proceeds from the sale of the additional notes to enter additional capped call transactions with the option counterparties, repay any remaining principal amount outstanding under the 2027 term loan and, with the remaining proceeds, if any, repay additional principal amount outstanding under the 2026 term loan.

Based in Pasadena, Calif., Tetra Tech provides environmental engineering and consulting services.

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