Terex locks in lowest rates in company’s history for refinanced debt

By Devika Patel

Knoxville, Tenn., May 3 – Terex Corp. refinanced $1.15 billion of senior notes last quarter, along with its term loans, resulting in new debt at what it said was the lowest rates in the company’s history.

The company said it expects to save $35 million in interest on an annualized basis following these transactions.

“We repaid our senior notes – total principal of $1.15 billion – and issued $600 million of senior notes at a lower rate, locking in that rate for eight years, versus the four years remaining on our old notes,” president and chief executive officer John L. Garrison said on the company’s first quarter earnings conference call on Wednesday.

“We also refinanced our term loans at a lower rate.

“The new rates are the lowest in the company’s history.

“We expect interest savings of approximately $30 million in 2017 and $35 million on an annualized basis, providing savings and stability through 2024,” he said.

On Feb. 15, the company redeemed the remaining $172.5 million of its 6% senior notes due 2021.

The total redemption price was $180.3 million, including a call premium of $5.2 million and accrued interest of $2.6 million.

HSBC Bank USA, NA was the trustee and paying agent.

The redemption was funded with cash on hand, including proceeds from the issue of 5 5/8% senior notes due 2025 on Jan. 31.

Investors had tendered $377.45 million principal amount of the 6% senior notes as of 5 p.m. ET on Jan. 30, the early tender date.

Concurrently with the offer, Terex issued a conditional notice of redemption for the remaining notes at a redemption price of 103% plus accrued interest, subject to a financing condition.

Terex was tendering for up to $550 million of the notes from Jan. 17 until Feb. 13 at a total purchase price of $1,031.25 per $1,000 of notes.

The total payment included an early tender premium of $10.00 per $1,000 of notes tendered by the early deadline.

Terex is a Westport, Conn.-based lifting and material handling solutions company.

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