Huntsman Corporation 8-K Summary
Business Context and Reporting Period
This Form 8-K Current Report, dated March 30, 2015, covers material definitive agreements entered into by Huntsman Corporation and its wholly-owned subsidiary, Huntsman International LLC ("HI"). The report details a new debt issuance and an amendment to an existing receivables securitization program.
Key Financial Metrics and Agreements
- New Debt Issuance: HI issued €300,000,000 in aggregate principal amount of 4.25% Senior Notes due 2025.
- Interest Terms: The Notes bear interest at 4.25% per year, payable semi-annually beginning October 1, 2015.
- Maturity: The Notes mature on April 1, 2025.
- Use of Proceeds: Net proceeds are intended to redeem a portion of HI's 8.625% Senior Subordinated Notes due 2021 and pay associated accrued interest.
- Receivables Facility Amendment: HI amended its U.S. Accounts Receivable Securitization Program, extending the commitment termination date to March 30, 2018, and reducing the facility applicable margin rate.
Material Changes and Covenants
The new Indenture imposes limitations on HI and its subsidiaries regarding the incurrence of additional indebtedness secured by principal properties, indebtedness of non-guarantor subsidiaries, sale and leaseback transactions, and consolidation or merger activities. The Notes are general unsecured senior obligations guaranteed on a general unsecured senior basis by the Guarantors.
Outlook, Risks, and Unusual Items
- Redemption Rights: HI may redeem the Notes prior to January 1, 2025, at 100% of principal plus a "make-whole" premium. On or after January 1, 2025, they may be redeemed at 100% of principal.
- Change of Control: Holders have the right to require HI to purchase the Notes at 101% of principal plus accrued interest upon certain change of control events.
- Registration Rights: HI agreed to file an exchange offer registration statement by June 2, 2016, to exchange the Notes for registered notes without transfer restrictions. If the exchange offer is not consummated, HI must file a shelf registration statement for resales.
Investor Verification Checklist
- Verify the exact amount of the 8.625% Senior Subordinated Notes due 2021 being redeemed with the proceeds.
- Confirm the specific reduction in the facility applicable margin rate for the U.S. Receivables Securitization Program.
- Review the full text of the Indenture (Exhibit 4.1) for detailed covenants and default provisions.
- Monitor the timeline for the exchange offer registration statement, with a deadline of June 2, 2016.