Article/Intelligence
Trinseo’s Ability to Refinance 2025 Bonds With 2L Debt Limited by Credit Agreement Secured Debt Capacity; Serta-Style Uptier Transaction Is Likely Possible
Relevant Items:Covenants Tear Sheet, Debt Document SummariesTrinseo Debt Documents Last week, Reorg reported that Trinseo’s 2025 bondholders are working with Perella Weinberg Partners and that certain lenders are working with Evercore. Reorg previously reported that an ad hoc group of lenders is working with Gibson Dunn, and an ad hoc group of bondholders is working with Paul Weiss. Trinseo and its creditors are working to address the $662 million of term loans due in 2024 and the $500 million of bonds due in 2025. In addition, if the term loans remain outstanding 91 days prior to their maturity (June 7, 2024), the revolver will mature on such date. This article will discuss the company’s flexibility to address those maturities, including with the proposed second lien term loan that would buy out the 2024 term loan and up to half of the 2025 notes. The company’s capital structure as of March 31 is shown below for reference: Proposed Private Credit Transaction Refinancing the 2024 term loan with a private first lien term loan is permitted under the credit agreement (which will remain outstanding, as it also governs the 2028 term loan) as “Refinancing Equivalent Debt” as long as it[...]