U.S. Silica Announces Successful Completion of Term Loan B Repricing and $25 Million Loan Repurchase
- Successful completion of the repricing of the $950 million senior secured Term Loan B.
- Reduction of interest rate margin by 75 basis points, from 4.75% to 4.00% for Term SOFR term loans.
- Repricing closed at the tight end of guidance at 99.75.
- Elimination of the 10 basis point Term SOFR Adjustment for term loans.
- Reduction of the soft call period from twelve months to six months.
- Voluntary term loan principal repayment of $25 million, extinguished at par using cash on hand.
- Repurchase of a total of $359 million in debt over the last seven quarters to lower debt service costs.
- Strategic efforts to reduce debt, strengthen the balance sheet, and improve the leverage profile.
- None.
The recent repricing of U.S. Silica Holdings, Inc.'s Term Loan B represents a strategic financial maneuver to capitalize on the company's strong performance and to optimize its capital structure. The reduction of the interest rate margin by 75 basis points, particularly in a high interest rate environment, signifies a substantial decrease in debt servicing costs. This move should positively impact the company's net interest margin, freeing up cash flows that can be potentially reinvested into the business or used to further pay down debt.
The elimination of the Term SOFR Adjustment and reduction in the soft call period from twelve to six months also indicate an improved risk profile and increased flexibility for the company. These actions demonstrate a proactive approach to debt management and could be perceived favorably by investors and credit rating agencies, potentially leading to an improved credit rating and lower cost of capital in the future.
U.S. Silica's successful debt repricing and the voluntary repayment of $25 million in principal indicate a robust demand for the company's debt instruments, reflecting investor confidence. This confidence likely stems from the company's position as a leading logistics provider to the oil and gas industry, a sector that has seen volatility but remains critical to the economy. The company's strategic efforts to reduce leverage and strengthen its balance sheet are essential in an industry where cash flow stability is paramount.
Analysts and investors may view these developments as indicators of U.S. Silica's commitment to financial discipline and operational efficiency. In the long term, these measures could enhance shareholder value and provide a more stable platform for growth, especially as the company continues to navigate the cyclical nature of the commodities market.
In conjunction with the repricing transaction, the Company completed a voluntary term loan principal repayment of
"We are pleased with the strong market demand for our Term Loan B," said Bryan Shinn, Chief Executive Officer. "U.S. Silica's continued robust performance and strategic efforts to reduce debt, strengthen our balance sheet, and improve our leverage profile are significant and we welcome the recognition and support from the markets."
BNP Paribas Securities Corp. is acting as administrative agent for the TLB. BNP Paribas Securities Corp. and MUFG Bank, Ltd. acted as joint lead arrangers and BNP Paribas Securities Corp. acted as the sole book runner.
About U.S. Silica
U.S. Silica Holdings, Inc. is a global performance materials company and is a member of the Russell 2000. The Company is a leading producer of commercial silica used in the oil and gas industry and in a wide range of industrial applications. Over its 124-year history, U.S. Silica has developed core competencies in mining, processing, logistics and materials science that enable it to produce and cost-effectively deliver over 800 diversified products to customers across our end markets.
U.S. Silica's wholly-owned subsidiaries include EP Minerals and SandBox Logistics™. EP Minerals is an industry leader in the production of products derived from diatomaceous earth, perlite, engineered clays, and non-activated clays. SandBox Logistics™ is a state-of-the-art leader in proppant storage, handling and well-site delivery, dedicated to making proppant logistics cleaner, safer and more efficient. The Company has 26 operating mines and processing facilities and two additional exploration stage properties across
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the federal securities laws — that is, statements about the future, not about past events. Such statements often contain words such as "expect," "may," "believe," "plan," "estimate," "intend," "anticipate," "should," "could," "will," "see," "likely," and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as statements regarding the ability of the Company to reduce debt, strengthen its balance sheet or adjust its leverage ratio. The Company cannot give any assurance that such statements will prove correct. These statements are subject to, among other things, the risks and uncertainties detailed in the Company's most recent Forms 10-K, 10-Q, and 8-K filed with or furnished to the Securities and Exchange Commission. Actual outcomes may vary materially from those reflected in the forward-looking statements. The forward-looking statements speak only as of the date made, and the Company disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.
U.S. Silica Holdings, Inc.
Investor Contact:
Patricia Gil
Vice President, Investor Relations & Sustainability
(281) 505-6011
gil@ussilica.com
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SOURCE U.S. Silica Holdings, Inc.
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