CINCINNATI--Milacron Holdings Corp. (NYSE: MCRN), a leading industrial technology company serving the plastic processing industry, today announced that its wholly owned subsidiary, Milacron LLC, received notice that its new $947.0 million term loan facility with a maturity of September 28, 2023 has been allocated to lenders. Milacron expects the new term loan facility, which will be implemented pursuant to an amendment of its existing term loan agreement, to be priced at 99.625% of the principal amount and bear interest at a rate of LIBOR plus 3.00% per annum, reducing to LIBOR plus 2.75% when Milacron’s net total leverage is less than or equal to 3.50x (adjusted on a quarterly basis). The proceeds of the new term loan facility, together with cash on hand, are expected to be used to repay Milacron’s existing $482.0 million term loan facility and its $464.4 million of outstanding 7.75% senior notes due 2021, as well as to pay fees and expenses associated with the refinancing transactions. In connection with the refinancing transactions, on January 13, 2017 a conditional notice of redemption was delivered to the holders of the 7.75% senior notes due 2021, whose senior notes are expected to be redeemed on February 15, 2017.
The transaction is anticipated to generate annual cash interest savings, after taxes, of approximately $19 million (calculated at current LIBOR rates), on a pro forma basis. As part of the transaction, we expect to incur cash fees and expenses of approximately $26 million (inclusive of debt extinguishment costs) for the quarter ended March 31, 2017.
The transaction is expected to close on February 15, 2017 and remains subject to documentation and customary closing conditions. As such, there is no assurance that the refinancing transactions will be completed on the terms described above or at all.
Milacron is a global leader in the manufacture, distribution and service of highly engineered and customized systems within the plastic technology and processing industry. Milacron is the only global company with a full-line product portfolio that includes hot runner systems, injection molding, blow molding and extrusion equipment.
This press release contains forward-looking statements. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “should,” “estimate” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Although forward-looking statements reflect management’s good faith beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements speak only as of the date the statements are made. Except as required by law, Milacron undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to our ability to complete the refinancing transactions on the terms described or at all, demand for our products being significantly affected by general economic conditions, any decline in the use of plastic, the competitiveness of the industries in which we operate and the financial resources of our competitors, our ability to successfully develop and implement strategic initiatives to increase cost savings and improve operating margins and the other risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on March 2, 2016, and other filings with the Securities and Exchange Commission, copies of which are available free of charge on our website at investors.milacron.com.