OHA is Lead Lender and Lead Left Arranger for Alkegen Debt Refinancing

Rhea-AI Summary

Oak Hill Advisors (OHA) has led a comprehensive debt refinancing for Alkegen, a global specialty materials platform. OHA served as the lead lender and Lead Left Arranger, providing the largest portion of the new senior facility. The refinancing includes:

• A new $1,925 million first lien term loan and notes facilities
• A new $200 million first-out revolving credit facility

The proceeds will be used to refinance existing first lien term loans, pay down revolver borrowings, extend maturities, and provide liquidity for Alkegen's growth and operational plans. Additionally, most existing holders of Alkegen's secured and unsecured notes due 2028 and 2029 exchanged their notes for new second lien notes due 2029. Alkegen is also offering to exchange remaining notes for new second lien notes.

Positive

• Successful refinancing of Alkegen's debt, providing improved financial flexibility
• Extension of debt maturities, reducing near-term repayment pressure
• Increased liquidity for executing growth and operational plans
• Strong support from investors and lenders, indicating confidence in Alkegen's strategy

Negative

• None.

Insights

Financial Analyst

The debt refinancing for Alkegen, led by Oak Hill Advisors (OHA), is a significant financial move that strengthens the company's balance sheet and extends its debt maturity profile. The $1,925 million new senior facility, combined with a $200 million revolving credit facility, provides Alkegen with improved liquidity and financial flexibility.

Key points to consider:

• The refinancing addresses near-term maturities, reducing immediate repayment pressure.
• Extended maturities give Alkegen more time to execute growth strategies and improve operations.
• The exchange of existing notes for new second lien notes due 2029 further extends debt obligations.
• OHA's position as lead lender suggests confidence in Alkegen's future prospects.

This transaction demonstrates Alkegen's ability to attract investor support and secure favorable financing terms, which is positive for the company's financial health and potential growth. However, investors should monitor how effectively Alkegen utilizes this improved financial position to drive operational improvements and market expansion.

Market Research Analyst

Alkegen's successful debt refinancing signals positive market sentiment towards the specialty materials sector, particularly in advanced applications. This transaction highlights several important trends:

• Continued investor appetite for high-performance materials companies, despite economic uncertainties.
• Growing importance of flexible financing solutions in supporting long-term growth strategies in the materials industry.
• Increasing role of alternative lenders like OHA in providing comprehensive capital solutions to mid-market companies.

The refinancing could potentially strengthen Alkegen's competitive position in the global specialty materials market. Investors should watch for:

• Alkegen's ability to capitalize on growth opportunities in advanced applications.
• Potential market share gains or new product developments enabled by the improved financial flexibility.
• Any shifts in industry dynamics or consolidation trends that may follow this transaction.

Overall, this refinancing may be indicative of broader positive sentiment towards innovative materials companies with strong growth potential.

New York, New York, Oct. 01, 2024 (GLOBE NEWSWIRE) -- Oak Hill Advisors (“OHA”) served as lead lender and Lead Left Arranger of a comprehensive debt refinancing solution for Alkegen, a global specialty materials platform providing high performance materials used in advanced applications. OHA is the largest lender across the new senior facility, which consists of new $1,925 million first lien term loan and notes facilities and a new $200 million first-out revolving credit facility. Proceeds will be used primarily to refinance in full Alkegen’s existing first lien term loans, pay down outstanding borrowings under its revolver, extend maturities and provide liquidity runway for the company to execute on its growth and operational plans. In addition, a majority of existing holders of Alkegen’s secured and unsecured notes due 2028 and 2029 exchanged their notes for new second lien notes due 2029. Alkegen is separately commencing an offer to exchange all of the remaining secured and unsecured notes for new second lien notes.

“We are very pleased with the successful completion of this transaction, which further strengthens our financial position and provides additional flexibility to continue to execute on our long-term growth priorities,” said John Dandolph, President and CEO of Alkegen. “We appreciate the continued strong support from our investors and lenders, which highlights their confidence in our strategic direction.”

Trevor Winstead, Managing Director at Oak Hill Advisors, added, “We are delighted to partner with Alkegen and have the opportunity to help strengthen its balance sheet by refinancing near-dated maturities. We appreciate the opportunity to work with John and his team to lead a capital structure solution that positions Alkegen to further its status as a global leader in specialty materials.”

OHA was a lender to Alkegen’s predecessor business and has followed the company over the years throughout various stages of growth. This transaction is reflective of OHA’s capabilities as a full-service capital solutions provider adept at partnering with companies to address complex and varied financing needs.

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About OHA: Oak Hill Advisors (OHA) is a leading global credit-focused alternative asset manager with over 30 years of investment experience. OHA works with institutions and individuals and seeks to deliver a consistent track record of attractive risk-adjusted returns. The firm manages approximately $65 billion of capital across credit strategies, including private credit, high yield bonds, leveraged loans, stressed and distressed debt and collateralized loan obligations as of June 30, 2024. OHA’s emphasis on long-term partnerships with companies, sponsors and other partners provides access to a proprietary opportunity set, allowing for customized credit solutions across market cycles.

With over 400 experienced professionals across six global offices, OHA brings a collaborative approach to offering investors a single platform to meet their diverse credit needs. OHA is the private markets platform of T. Rowe Price Group, Inc. (NASDAQ – GS: TROW). For more information, please visit oakhilladvisors.com.

About Alkegen: Alkegen creates high performance specialty materials used in advanced applications including electric vehicles, energy storage, filtration, fire protection and high-temperature insulation, among many others. Employing a vertically integrated approach across our broad array of technology platforms, Alkegen is committed to achieving energy efficiency, pollution reduction, and enhanced safety for individuals, structures, and equipment. Our overarching mission is to help the world breathe easier, live greener and go further than ever before. Alkegen has 60+ manufacturing facilities operating in 12 countries and employs 7,500+ employees globally.

FAQ

What is the total value of Alkegen's new debt refinancing led by OHA?

The new senior facility led by OHA for Alkegen's debt refinancing consists of a $1,925 million first lien term loan and notes facilities, plus a $200 million first-out revolving credit facility, totaling $2,125 million.

How will Alkegen use the proceeds from the debt refinancing?

Alkegen will use the proceeds primarily to refinance existing first lien term loans, pay down outstanding borrowings under its revolver, extend maturities, and provide liquidity for executing growth and operational plans.

What changes were made to Alkegen's existing notes as part of the refinancing?

A majority of existing holders of Alkegen's secured and unsecured notes due 2028 and 2029 exchanged their notes for new second lien notes due 2029. Alkegen is also offering to exchange all remaining secured and unsecured notes for new second lien notes.

How does the debt refinancing benefit Alkegen's financial position?

The refinancing strengthens Alkegen's financial position by extending debt maturities, providing additional flexibility, and increasing liquidity to support the company's long-term growth priorities.