Olin Announces Redemption of 9.75% Senior Notes Due 2023

Rhea-AI Summary

Olin Corporation (NYSE: OLN) plans to redeem all of its outstanding $120 million 9.75% senior notes due October 15, 2023. The redemption, scheduled for January 15, 2021, will occur at a cash redemption price of 102.438% of the principal amount, equating to a $3.0 million aggregate premium. Olin will utilize $123.0 million from operational cash flow for this redemption, which is expected to save the company approximately $12 million annually in interest expenses.

Positive

• Redemption of $120 million in high-cost bonds to reduce debt levels.
• Expected annual interest expense reduction of approximately $12 million.

Negative

• None.

CLAYTON, Mo., Dec. 16, 2020 /PRNewswire/ -- Olin Corporation (NYSE: OLN) announced today that it has notified bondholders that it intends to redeem all of the $120 million of its outstanding 9.75% senior notes due October 15, 2023 (the "Notes").  The Notes are expected to be redeemed on January 15, 2021 at a redemption price in cash of 102.438% of the principal amount of the Notes (representing an aggregate redemption premium of approximately $3.0 million).  The Notes were issued in connection with the 2015 Dow Chlorine Products acquisition.  Olin expects to fund the redemption using $123.0 million of cash generated from operations.   

"The $120 million redemption of the high-cost bonds reflects our strategy to utilize excess cash flow to lower our debt levels," said Scott Sutton, President and Chief Executive Officer. "We expect that the redemption will reduce annual interest expense by approximately $12 million."

COMPANY DESCRIPTION

Olin Corporation is a leading vertically-integrated global manufacturer and distributor of chemical products and a leading U.S. manufacturer of ammunition.  The chemical products produced include chlorine and caustic soda, vinyls, epoxies, chlorinated organics, bleach and hydrochloric acid.  Winchester's principal manufacturing facilities produce and distribute sporting ammunition, law enforcement ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.

Visit www.olin.com for more information on Olin.

FORWARD-LOOKING STATEMENTS

This communication includes forward-looking statements.  These statements relate to analyses and other information that are based on management's beliefs, certain assumptions made by management, forecasts of future results, and current expectations, estimates and projections about the markets and economy in which we and our various segments operate.  The statements contained in this communication that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties.

We have used the words "anticipate," "intend," "may," "expect," "believe," "should," "plan," "project," "estimate," "forecast," "optimistic," and variations of such words and similar expressions in this communication to identify such forward-looking statements.  These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control.  Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements.  We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.  The payment of cash dividends is subject to the discretion of our board of directors and will be determined in light of then-current conditions, including our earnings, our operations, our financial conditions, our capital requirements and other factors deemed relevant by our board of directors.  In the future, our board of directors may change our dividend policy, including the frequency or amount of any dividend, in light of then-existing conditions.

The risks, uncertainties and assumptions involved in our forward-looking statements, many of which are discussed in more detail in our filings with the SEC, including without limitation the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, include, but are not limited to, the following:

• sensitivity to economic, business and market conditions in the United States and overseas, including economic instability or a downturn in the sectors served by us, such as vinyls, urethanes, and pulp and paper;
• the cyclical nature of our operating results, particularly declines in average selling prices in the chlor alkali industry and the supply/demand balance for our products, including the impact of excess industry capacity or an imbalance in demand for our chlor alkali products;
• our reliance on a limited number of suppliers for specified feedstock and services and our reliance on third-party transportation;
• higher-than-expected raw material, energy, transportation, and/or logistics costs;
• failure to control costs or to achieve targeted cost reductions;
• new regulations or public policy changes regarding the transportation of hazardous chemicals and the security of chemical manufacturing facilities;
• the occurrence of unexpected manufacturing interruptions and outages, including those occurring as a result of labor disruptions and production hazards;
• weak industry conditions affecting our ability to comply with the financial maintenance covenants in our senior secured credit facility;
• the negative impact from the COVID-19 pandemic and the global response to the pandemic;
• the failure or an interruption of our information technology systems;
• complications resulting from our multiple enterprise resource planning systems and the conversion to a new system;
• the loss of a substantial customer for either chlorine or caustic soda could cause an imbalance in customer demand for these products;
• our substantial amount of indebtedness and significant debt service obligations;
• unexpected litigation outcomes;
• changes in, or failure to comply with, legislation or government regulations or policies;
• costs and other expenditures in excess of those projected for environmental investigation and remediation or other legal proceedings;
• failure to attract, retain and motivate key employees;
• the effects of any declines in global equity markets on asset values and any declines in interest rates used to value the liabilities in our pension plan;
• adverse changes in international markets, including economic, political or regulatory changes;
• our long range plan assumptions not being realized causing a non-cash impairment charge of long-lived assets;
• adverse conditions in the credit and capital markets, limiting or preventing our ability to borrow or raise capital; and
• various risks associated with our transition and subsequent operation of the Lake City U.S. Army Ammunition Plant.

All of our forward-looking statements should be considered in light of these factors.  In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of our forward-looking statements.

2020-19

View original content to download multimedia:http://www.prnewswire.com/news-releases/olin-announces-redemption-of-9-75-senior-notes-due-2023--301193577.html

SOURCE Olin Corporation

FAQ

What is Olin Corporation's plan regarding its 9.75% senior notes?

Olin Corporation plans to redeem its entire $120 million of outstanding 9.75% senior notes due October 15, 2023.

When will Olin Corporation redeem its senior notes?

The redemption of the senior notes is scheduled for January 15, 2021.

How will Olin Corporation fund the redemption of its senior notes?

Olin Corporation will fund the redemption using $123 million generated from its operations.

What is the redemption price for Olin Corporation's senior notes?

The redemption price for the senior notes is set at 102.438% of the principal amount.

How much will Olin Corporation save in interest expenses after redeeming the notes?

Olin Corporation expects to save approximately $12 million annually in interest expenses.