Trinseo, along with certain subsidiaries, has entered a Transaction Support Agreement (TSA) with a group of creditors, collectively referred to as Supporting Creditors, representing holders of senior notes and term loans. This TSA aims to bolster Trinseo’s financial position by refinancing debt, extending maturity schedules, and increasing liquidity, ensuring no significant debt repayments are due until 2028.
The proposed transactions under the TSA include:
- Refinancing 2025 Senior Notes: The $115 million senior notes due in 2025 will be redeemed and replaced by $115 million in 2028 Refinance Term Loans, maintaining similar terms as those in the September 2023 credit agreement.
- New Revolving Credit Facility: A $300 million revolving credit facility will be introduced, with a maturity date in February 2028 and an adjusted springing covenant. This facility, replacing the current one set to mature in 2026, will provide immediate liquidity access.
- Exchange of 2029 Senior Notes: At least $330 million of senior notes due in 2029 will be exchanged for new second-lien senior secured notes, maturing in the same year but offered at a discount. This transaction captures a savings of approximately $49 million for the company.
The transactions, expected to close by January 2025, aim to reinforce Trinseo’s financial stability and operational flexibility. The Supporting Creditors comprise 74% of the 2029 senior notes, 89% of existing revolving commitments, and 58% of outstanding term loans. This widespread support underpins the anticipated successful execution of the TSA terms.
Strategic Significance
Frank Bozich, Trinseo’s President and CEO, emphasized the importance of this restructuring in enabling the company to pursue strategic growth. He noted that the enhanced liquidity and extended debt maturities provide a stronger foundation for Trinseo’s transformation as a specialty materials leader. The added financial flexibility will support investments in sustainable innovations, portfolio optimization, and advanced circular technologies.
Details of the Exchange Offer
As part of the TSA, Trinseo will initiate an exchange offer to all holders of its 5.125% Senior Notes due 2029. These holders will have the option to exchange their notes for 7.625% Second Lien Senior Secured Notes at a discounted rate. This approach provides significant financial advantages, enabling Trinseo to improve its balance sheet while maintaining creditor engagement.
Professional Support
Trinseo has enlisted several advisory firms for the TSA process:
- Ropes & Gray LLP served as legal counsel.
- Centerview Partners LLC acted as the investment banker.
- FTI Consulting provided financial advisory services.
Company Overview
Trinseo, listed on the NYSE as TSE, is a global provider of specialty materials and solutions. The company serves industries ranging from building and construction to consumer goods, medical devices, and mobility. Leveraging decades of experience, Trinseo focuses on sustainable innovations to meet the evolving needs of its customers and promote environmentally responsible practices.
The company remains committed to transparency and regulatory compliance. Details of the TSA and related transactions are disclosed in a Form 8-K filing with the SEC. Trinseo emphasized that this press release does not constitute an offer to buy or sell securities but is a key update on its strategic initiatives to strengthen its financial health and market position.
