Rentech receives additional $63 million financing from GSO

The dual-tranche facility tops up the $150 million loan the wood fibre company arranged with GSO in April last year.

Los Angeles-based wood fibre company Rentech has increased its credit facility with GSO Capital Partners by $63 million, the company announced yesterday (17 February). This brings the total financing from GSO to $213 million, following the original $150 million loan last April.

The new loan will be used to complete Rentech’s Canadian wood pellet projects.

The new facility is a dual-tranche four-year term loan with an availability period of up to 12 months. The $45 million tranche is to fund construction, working capital and other costs relating to its Atikokan and Wawa pellet projects until they generate positive cash flow. The remaining $18 million tranche is a stand-by facility in the event of unplanned downtime at the firm’s East Dubuque facility, or unfavourable changes in commodity prices that affect cash distributions from Rentech Nitrogen Partners.

The whole facility matures on 9 April 2019. The loans are secured by a fixed number of units of the company’s subsidiary, Rentech Nitrogen, as well as physical assets of Rentech and its subsidiaries. The new loan has an interest rate of nine percent over LIBOR, with a LIBOR floor of one percent. Rentech increased the collateral securing its obligations under preferred stock holders' existing put option right agreements.

GSO originally loaned $150 million to Rentech in April last year. That facility consisted of a $100 convertible loan and $50 million term debt.   

Rentech owns and operates wood fibre processing, wood pellet production and nitrogen fertilizer manufacturing businesses. The company is traded publicly on the NASDAQ stock exchange.