Calumet Announces $100 Million Private Placement of 9.75% Senior Notes due 2028

Rhea-AI Summary

Calumet (NASDAQ: CLMT) announced a private placement offering of $100 million in 9.75% Senior Notes due 2028. The offering, made through its subsidiaries, will be available to eligible purchasers under Rule 144A and Regulation S. The company plans to use the net proceeds to redeem a portion of its outstanding 11.00% Senior Notes due 2026, with redemption scheduled on or before April 15, 2025.

The new notes mirror the company's existing 9.75% Senior Notes due 2028, of which $325 million was issued on June 27, 2023. While having substantially identical terms, the new notes will be issued under a separate indenture with different CUSIP numbers. The securities will be offered exclusively to qualified institutional buyers and non-U.S. persons outside the United States.

Positive

• Reduction in interest expense by refinancing 11.00% notes with 9.75% notes
• Extension of debt maturity from 2026 to 2028

Negative

• Additional $100 million in debt issuance
• Higher interest rate (9.75%) compared to current market rates

Insights

Financial Analyst

This $100 million senior notes offering represents a strategic debt refinancing move that will reduce Calumet's interest expense burden. By replacing $100 million of 11.00% notes due 2026 with 9.75% notes due 2028, the company will save approximately $1.25 million annually in interest costs. Additionally, this extends the maturity profile by two years, improving financial flexibility.

The mirror issuance structure, matching the terms of existing 2028 notes, suggests market acceptance of Calumet's credit profile. The 9.75% coupon rate, while still high-yield, reflects improved credit metrics compared to the 11.00% 2026 notes being redeemed. This private placement under Rule 144A indicates institutional investor interest, though the high yield still signals some market concerns about credit quality.

For context, this refinancing affects about 30.7% of the outstanding 2026 notes and will bring total 2028 notes to $425 million. The timing, ahead of the April 15, 2025 redemption deadline, provides operational certainty while taking advantage of current market conditions.

Market Research Analyst

This debt restructuring signals positive momentum in Calumet's financial strategy. The ability to secure lower-cost debt in the current high-rate environment demonstrates improving market confidence in the company's specialty chemicals and renewable fuels business model. The 1.25% interest rate reduction, while modest, represents meaningful progress in optimizing the capital structure.

The private placement approach to qualified institutional buyers suggests strong institutional demand, which could support future refinancing efforts. The decision to maintain separate CUSIP numbers, rather than combining with existing 2028 notes, provides flexibility for future liability management. This transaction positions Calumet more competitively within the specialty chemicals sector, where capital structure optimization is important for maintaining operational flexibility and funding growth initiatives.

INDIANAPOLIS, Jan. 14, 2025 /PRNewswire/ -- Calumet, Inc. (NASDAQ: CLMT) (the "Company" or "Calumet") today announced that, subject to market conditions, its wholly owned subsidiaries, Calumet Specialty Products Partners, L.P. (the "Partnership") and Calumet Finance Corp. (together with the Partnership, the "Issuers"), intend to offer (the "Offering") for sale to eligible purchasers in a private placement under Rule 144A and Regulation S under the Securities Act of 1933, as amended (the "Securities Act"), $100 million in aggregate principal amount of 9.75% Senior Notes due 2028 (the "New Notes"). Calumet intends to use all of the net proceeds from the Offering to redeem a portion of the Issuers' outstanding 11.00% Senior Notes due 2026 (the "2026 Notes") on or before April 15, 2025 (the "Redemption").

The New Notes are a mirror issue to the Issuers' existing 9.75% Senior Notes due 2028, of which $325 million in aggregate principal amount was issued on June 27, 2023 (the "Original Notes"). The New Notes will have substantially identical terms as the Original Notes. However, the New Notes will be issued under a separate indenture and have different CUSIP numbers from the Original Notes. 

The securities to be offered will not be, and have not been, registered under the Securities Act, or any state securities laws, and unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Calumet plans to offer and sell the securities only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act.

This press release does not constitute a notice of redemption with respect to the 2026 Notes. This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any of these securities, nor shall there be any sale of these securities in any state in which such offer, solicitation, or sale would be unlawful. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

About Calumet

Calumet, Inc. (NASDAQ: CLMT) manufactures, formulates and markets a diversified slate of specialty branded products and renewable fuels to customers across a broad range of consumer-facing and industrial markets. Calumet is headquartered in Indianapolis, Indiana and operates twelve facilities throughout North America.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements and information in this press release may constitute "forward-looking statements." The words "will," "may," "intend," "believe," "expect," "outlook," "forecast," "anticipate," "estimate," "continue," "plan," "should," "could," "would," or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. The statements discussed in this press release that are not purely historical data are forward-looking statements, including, but not limited to, the Offering and the use of proceeds therefrom and the Redemption. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While our management considers these assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in our forward-looking statements. For additional information regarding known material risks, uncertainties and other factors that can affect future results, please see our filings with the Securities and Exchange Commission ("SEC"), including the risk factors and other cautionary statements in the latest Annual Report on Form 10-K of the Partnership and other filings with the SEC by the Company and the Partnership. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.

 

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SOURCE Calumet, Inc.

FAQ

What is the size and interest rate of Calumet's new senior notes offering?

Calumet is offering $100 million in 9.75% Senior Notes due 2028 through a private placement.

How will Calumet (CLMT) use the proceeds from the 2028 notes offering?

Calumet will use the net proceeds to redeem a portion of its outstanding 11.00% Senior Notes due 2026, with redemption scheduled on or before April 15, 2025.

What is the relationship between CLMT's new notes and the existing 2028 notes?

The new notes mirror Calumet's existing $325 million 9.75% Senior Notes due 2028 issued on June 27, 2023, with identical terms but different CUSIP numbers and separate indenture.

Who is eligible to purchase CLMT's new 2028 senior notes?

The notes are available only to qualified institutional buyers under Rule 144A and non-U.S. persons outside the United States under Regulation S.