GSO invests $150m in Rentech

The wood pellet and fertilizer supplier used proceeds from the transaction to pay down a $50m balance on a revolving loan. 

The Blackstone Group’s credit arm GSO Capital Partners secured a $150 million investment in wood and fertilizer supplier Rentech earlier this week.

GSO invested $100 million in convertible preferred stock and $50 million in the form of a term loan. GSO senior managing director Douglas Ostrover and former Smurfit-Stone Container Corporation chairman Patrick Moore will join Rentech’s board.

The five-year $50 million term loan carries an annual interest rate of LIBOR plus 700 basis points with a 1 percent floor. The loan also has an according feature that can increase its size by $75 million.

Ostrover said that the firm had been in discussions with Rentech for almost two years. Proceeds from the investment allowed Rentech to repay a $50 million balance on its revolving margin loan, and will also be used to fund growth in the company’s wood fibre processing business.

“Blackstone/GSO can also provide additional capital and access to investment opportunities as we continue to explore opportunities in our fibre and nitrogen businesses,” said Rentech president and chief executive officer D. Hunt Ramsbottom in a statement.