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Tenneco Amends And Restates Its Senior Credit Facility; Completes Consent Solicitation And Indenture Amendments For 8 1/8 Percent Senior Notes Due 2015

Stocks in this article: TEN

Tenneco Inc. (NYSE: TEN) announced today that it has entered into an amendment and restatement to refinance its existing $834 million senior credit facility with a new $1.1 billion senior credit facility. This refinancing, which Tenneco expects to close later today, will enhance Tenneco’s financial flexibility by lowering annual interest expense, and increasing the size and extending the term of its revolving credit facility.

The new senior credit facility consists of a $850 million revolving credit facility and a $250 million term loan A facility, which replace Tenneco’s former $556 million revolving credit facility, $148 million term loan B facility and $130 million tranche B-1 letter of credit/revolving loan facility. The revolving credit facility will mature on March 22, 2017. The term loan A facility requires quarterly installments and has a final maturity of March 22, 2017. The proceeds of the term loan A facility will be used to fund Tenneco’s previously announced tender offer for any and all of its outstanding $250 million 8 1/8 percent Senior Notes due 2015 (the “2015 Notes”).

“This new credit facility improves Tenneco’s financial flexibility and significantly lowers our borrowing costs,” said Gregg Sherrill, chairman and CEO, Tenneco Inc. “The retirement of the 2015 Notes and expansion of our revolver improves our debt maturity profile while reducing our annual interest expense by approximately $20 million.”

Tenneco will pay LIBOR plus 2.50% on borrowings under the revolving credit facility and the term loan A facility. Tenneco previously paid LIBOR plus 4.00% on borrowings under its revolving credit facility and LIBOR plus 4.50% on borrowings under the term loan B facility.

Additionally, Tenneco today announced the successful completion of its consent solicitation with respect to its 2015 Notes.

On March 8, 2012, Tenneco commenced a cash tender offer for any and all of the 2015 Notes and a solicitation of consents to certain proposed amendments to the indenture governing the 2015 Notes. The deadline for tendering 2015 Notes to be eligible to receive a consent payment in connection with the consent solicitation was 5:00 p.m., New York City time, on March 21, 2012. As of the consent payment deadline, Tenneco had received tenders and consents representing $231,590,000 in aggregate principal amount of the outstanding 2015 Notes. The consents received exceeded the minimum needed to amend the indenture governing the 2015 Notes. Accordingly, Tenneco and The Bank of New York Mellon Trust Company, N.A., as trustee, have executed a supplemental indenture that eliminates substantially all of the restrictive covenants and certain event of default provisions in the indenture governing the 2015 Notes and reduces the minimum notice period required to effect a call for redemption from 30 to 5 days.

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