MALVERN, PA — PQ Group Holdings Inc. (NYSE: PQG) announced that its indirect, wholly-owned subsidiary, PQ Corporation, has successfully priced and allocated a new senior secured term loan facility in an aggregate principal amount of $900 million.
Proceeds from the 2021 Term Loan Facility, together with cash on hand, will be used to repay (1) all of the Company’s obligations under its New Term Loan Credit Agreement, dated as of July 22, 2020 (the “2020 Term Loan Facility”) and (2) a portion of the Company’s obligations under its Amended and Restated Term Loan Credit Agreement, dated May 4, 2016 (the “2016 Term Loan Facility”), and to pay related fees and expenses.
The 2021 Term Loan Facility will be issued at 99.75% of par (or with an original issue discount of 0.25%), will have interest at a floating rate of LIBOR (with a 0.50% minimum LIBOR floor) plus 2.75% (or, depending on our first lien net leverage ratio, 2.50%) per annum, and will mature in June 2028.
“With this term loan financing in place and a targeted closing on the sale of Performance Chemicals in the third quarter, we now expect to be at the upper end of the ranges previously provided for the planned special dividend ($2.50 to $3.25 per share) and debt reduction ($450 million to $550 million),” said Mike Crews, PQ Executive Vice President and Chief Financial Officer. “In addition, with continued strong operating results and cash flow generation, we now expect our net debt to Adjusted EBITDA ratio to be in the mid 3x range at the end of 2021.”
The closing of the 2021 Term Loan Facility, the full repayment of the 2020 Term Loan Facility and the partial repayment of the 2016 Term Loan Facility are expected to occur in the first week of June 2021, subject to customary closing conditions. Payment of the planned special dividend is subject to formal declaration by the PQ Group Holdings Inc. Board of Directors.
PQ Group Holdings Inc. and subsidiaries is a leading integrated and innovative global provider of specialty catalysts and services.
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