PQ Group Holdings Inc. (NYSE:PQG), a leading integrated and innovative global provider of specialty catalysts, materials, chemicals and services, announced today that its indirect, wholly owned subsidiary, PQ Corporation (the “Company”), has successfully secured commitments for a non-fungible senior secured term loan facility (“New Term Loan Facility”) in an aggregate principal amount of $650 million. Proceeds will be used to redeem the Company’s 6.750% Senior Secured Notes due 2022 (the “2022 Notes”). This refinancing will significantly reduce the Company's interest expense and extend all material debt maturities to 2025 or later.
The New Term Loan Facility will be issued with an original issue discount of 1.5%, will have interest at a floating rate of LIBOR (with a 1% minimum LIBOR floor) plus 3.0% per annum, and will mature in February 2027, coterminous with the Company’s existing term loan facility. As a result of the refinancing, the Company expects to reduce cash interest by approximately $16 million per annum.
“We are very pleased with the favorable outcome of this refinancing, which again highlights investors’ confidence in the resiliency of our portfolio and financial strength,” said Mike Crews, PQ Executive Vice President and Chief Financial Officer.
As previously announced, proceeds from this transaction, together with cash on hand, will be used to redeem all of the Company’s existing 2022 Notes at the current call price and to pay related fees and expenses. The closing of the New Term Loan Facility and the redemption of the 2022 Notes are expected to occur on July 22, 2020, subject to customary closing conditions.
Investor Contact:
Nahla A. Azmy
(610) 651-4561
Nahla.Azmy@pqcorp.com
About PQ Group Holdings Inc.
PQ Group Holdings Inc. and subsidiaries is a leading integrated and innovative global provider of specialty catalysts, materials, chemicals and services. We support customers globally through our strategically located network of manufacturing facilities. We believe that our products, which are predominantly inorganic, and services contribute to improving the sustainability of the environment.
We have four uniquely positioned specialty businesses: Refining Services provides sulfuric acid recycling to the North American refining industry; Catalysts serves the packaging and engineering plastics and the global refining, petrochemical and emissions control industries; Performance Materials produces transportation reflective safety markings for roads and airports; and Performance Chemicals supplies diverse product end uses, including personal and industrial cleaning products, fuel-efficient tires, surface coatings, and food and beverage products.
We serve over 4,000 customers globally across many end uses and operate over 70 manufacturing facilities which are strategically located across six continents. For more information, see our website at https://www.pqcorp.com.
Note on Forward-Looking Statements
Some of the information contained in this press release constitutes “forward-looking statements.” Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “projects” and similar references to future periods. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Examples of forward-looking statements include, but are not limited to, statements regarding the closing of the New Term Loan Facility and the application of the proceeds thereof, together with cash on hand, to redeem the 2022 Notes and to pay related fees and expenses. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, regional, national or global political, economic, business, competitive, market and regulatory conditions, including the ongoing COVID-19 pandemic, tariffs and trade disputes, currency exchange rates and other factors, including those described in the sections titled “Risk Factors” and “Management Discussion & Analysis of Financial Condition and Results of Operations” in our filings with the SEC, which are available on the SEC’s website at www.sec.gov. These forward-looking statements speak only as of the date of this release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable law.
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