Oklahoma City’s LSB Industries, Inc. announced that it priced its previously announced offering of $500 million in aggregate principal amount of senior secured notes due 2028 which will be sold in a private placement to eligible purchasers.
The notes will be guaranteed on a senior secured basis by all of LSB’s existing subsidiaries and by certain of LSB’s future domestic wholly owned subsidiaries stated the company in its announcement.
The notes will bear an annual rate of interest of 6.250% and will mature on October 15, 2028. They will also be issued at a price equal to 100% of their face value.
The notes and the guarantees will be secured, subject to certain exceptions and permitted liens, (a) on a first-priority basis by a substantial portion of LSB’s and the guarantors’ assets (other than the assets securing LSB’s working capital revolver loan), and (b) on a second-priority basis by certain of LSB’s and the guarantors’ assets that secure LSB’s working capital revolver loan on a first-priority basis, including accounts receivable, inventory, and certain other related assets and proceeds thereof.
The closing of this private offering is expected to occur on October 14, 2021, subject to customary closing conditions.
In connection therewith, the Company submitted a conditional notice of redemption to redeem $435 million aggregate principal amount of its 9.625% Senior Secured Notes due 2023, representing all of the outstanding Existing Notes, at a redemption price equal to 103.609% of the principal amount thereof, plus accrued and unpaid interest on the Existing Notes redeemed to but excluding the redemption date, which is scheduled for October 29, 2021, subject to consummation of the offering of the Notes.
LSB intends to use the net proceeds from this offering for the redemption, to pay related transaction fees, expenses and premiums, and, to the extent of any remaining net proceeds, for general corporate purposes. Pending such application of the net proceeds of this offering, they may be invested in highly rated money market funds, U.S. government securities, treasury bills or short-term commercial paper.
Source: LSB Industries release
