Rentech intends to use the net proceeds from the facility to fund growth in its wood fibre processing business and for general corporate purposes. Rentech borrowed $50 million under the facility, with the remaining $50 million of capacity available for future borrowings, so long as certain conditions are satisfied at the time of borrowing.
Dan Cohrs, CFO of Rentech, stated, “The revolving loan facility provides us with low-cost capital that we can use to fund our strategy of expanding our wood fibre processing business through acquisitions and new development, with the goal of an initial public offering as a master limited partnership.”
Rentech provided 15.4 million of the 23.25 million common units of Rentech Nitrogen currently owned by Rentech as initial collateral. Under certain circumstances, up to 19.4 million units may be pledged as collateral. Rentech will continue to receive all cash distributions paid on the collateral units and retains the right to sell units not held as collateral as long as certain conditions outlined in the loan facility are met. Rentech, Inc. is the guarantor of the revolving loan facility.
Credit Suisse AG, Cayman Islands Branch is serving as lead lender and administrative agent on the facility. Credit Suisse AG, Cayman Islands Branch and Morgan Stanley Bank, N.A. each hold $50 million of the revolving loan facility commitment at close.
Rentech, Inc. owns and operates wood fibre processing and nitrogen fertilizer manufacturing businesses.