Methanex Corporation Announces Successful Syndication of Acquisition Financing

Rhea-AI Summary

Methanex (TSX:MX, NASDAQ:MEOH) has successfully syndicated acquisition financing for its previously announced $2.05 billion acquisition of OCI Global's international methanol business. The financing package includes up to $650 million in Term Loan A commitments with variable interest rates and flexible repayment terms, and a $600 million revolving credit facility split between a $400 million five-year tranche and a $200 million three-year tranche. The syndication banks continue to underwrite the remaining $525 million bridge facility. The new facilities will replace the company's existing $500 million facility and include consistent financial covenants.

Positive

• Secured $1.25 billion in committed financing for the OCI acquisition
• Flexible repayment terms on Term Loan A supporting de-leveraging strategy
• Increased revolving credit facility from $500M to $600M
• Unanimous support from banking partners indicating strong financial credibility

Negative

• Taking on significant debt of $2.05B for the acquisition
• Exposure to variable interest rates on Term Loan A
• Increased leverage and financial obligations

Insights

Financial Analyst

The successful syndication of $1.25 billion in acquisition financing marks a significant milestone in Methanex's $2.05 billion OCI acquisition strategy. The financing structure, combining a $650 million Term Loan A and $600 million revolving credit facility, provides substantial flexibility for debt management. The unanimous bank support signals strong confidence in the deal's fundamentals.

The variable interest rate structure and flexible repayment terms on the Term Loan A are particularly strategic, enabling aggressive de-leveraging post-acquisition. The expanded revolving credit facility, increasing from $500 million to $600 million, enhances liquidity while maintaining consistent financial covenants. With $525 million remaining in bridge facility underwriting, the company has secured comprehensive funding for the transformative OCI acquisition.

VANCOUVER, British Columbia, Oct. 29, 2024 (GLOBE NEWSWIRE) -- Methanex Corporation (TSX:MX) (NASDAQ:MEOH) (“Company”) announced today the successful syndication of acquisition financing to support the earlier announced agreement to acquire OCI Global’s international methanol business (“OCI Acquisition”) for $2.05 billion.

The new financing arrangements are with a syndicate of highly rated financial institutions and include:

• Up to $650 million in Term Loan A commitments which can be drawn upon closing of the OCI Acquisition. The Term Loan A carries a variable interest rate and is split between three and four-year tenors that can be flexibly repaid to support de-levering.

• $600 million in revolving credit facility commitments, split between a $400 million tranche which will have a renewed five-year tenor and a $200 million tranche with a three-year tenor, both from closing of the OCI Acquisition. This new facility will replace the Company’s existing $500 million facility which remains available until the transaction closes.
  

• Both the Term Loan A and new revolving credit facility include financial covenants consistent with the Company’s existing credit facilities.
  

The syndication banks continue to underwrite the remaining bridge facility of $525 million.

Dean Richardson, Senior Vice President, Finance & Chief Financial Officer of Methanex, said, “I am pleased to announce this successful syndication which had the unanimous support of our banking partners. The structure of the Term Loan A provides flexibility to support our commitment to de-lever.”

Methanex is a Vancouver-based, publicly traded company and is the world’s largest supplier of methanol to major international markets. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol “MX” and on the NASDAQ Global Market in the United States under the trading symbol “MEOH”. Methanex can be visited online at www.methanex.com.

Inquiries:
Sarah Herriott
Director, Investor Relations
Methanex Corporation
604-661-2600 or Toll Free: 1-800-661-8851
www.methanex.com

FAQ

What is the total value of Methanex (MEOH) acquisition financing for OCI Global's methanol business?

The total acquisition financing package includes up to $650 million in Term Loan A, $600 million in revolving credit facilities, and $525 million in bridge facility, supporting the $2.05 billion acquisition.

What are the terms of Methanex's (MEOH) new revolving credit facility?

The new $600 million revolving credit facility is split between a $400 million five-year tranche and a $200 million three-year tranche, replacing the existing $500 million facility.

What type of interest rate does Methanex (MEOH) Term Loan A carry?

The Term Loan A carries a variable interest rate and is split between three and four-year tenors with flexible repayment terms.