ITEM 1.01Entry Into a Material Definitive Agreement.
On July 18, 2024, Trinseo Ireland Global IHB Limited (the “Investment Manager”), an indirect wholly owned subsidiary of Trinseo PLC (the “Company”) entered into a Credit and Security Agreement with Styron Receivables Funding Designated Activity Company, a special purpose finance entity (the “Borrower”), KKR Credit Advisors (US) LLC as structuring agent, GLAS USA LLC, as Administrative Agent, GLAS Americas LLC, as Collateral Agent, and the Lenders named therein (the “KKR Credit Agreement”). The KKR Credit Agreement provides for a $150 million non-recourse revolving credit facility (the “Securitization”) collateralized by certain trade receivables generated by certain of the Company’s Swiss, German, Dutch and U.S. subsidiaries (the “Originators”).
Under the KKR Credit Agreement, the Lenders make advances to the Borrower to finance the acquisition of receivables from the Originators. Availability under the Securitization is based on the accounts receivable generated by the Originators from the sale of specialty chemicals products. Borrowings under the Securitization bear interest at an interest rate equal to Adjusted Term SOFR or EURIBOR (each as defined in the KKR Credit Agreement, subject to a floor of 1.0%) depending on the borrowing currency, plus a margin of 4.75%. The Securitization incurs interest on a minimum of $75,000,000 of advances irrespective of actual amounts outstanding. The Borrower is also required to pay a fixed upfront fee to the structuring advisor as well as ongoing agent fees, servicing fees and an unused facility fee.
The KKR Credit Agreement contains certain customary representations, warranties and non-financial covenants, and standard events of default, including but not limited to a cross-default to the Company’s and its subsidiaries other material indebtedness. Proceeds from the Securitization were used in part to repay outstanding obligations under the HSBC Facility (defined below) and for general corporate purposes.
The Borrower’s sole purpose is the purchase of the receivables from the Originators and the subsequent grant of a security interest in, such receivables to the Collateral Agent for the benefit of the Lenders. The Borrower is an orphan legal entity and assets of the Borrower are not available to pay creditors of the Company, the Originators, or any affiliate thereof.
The maturity date of the Securitization is January 18, 2028, subject to a one-year maturity date extension exercisable at the Borrower’s discretion, subject to certain conditions and extension fees. The Company may terminate the KKR Credit Agreement at any time, subject to a 1.0% call premium if terminated prior to January 18, 2027.
The foregoing description of the material terms of the KKR Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the complete terms and conditions of the KKR Credit Agreement, a copy of which is filed herewith as Exhibit 10.1 and is incorporated herein by reference. A copy of the press release announcing the Securitization is furnished herewith as Exhibit 99.1 and incorporated by reference.
ITEM 1.02Termination of a Material Definitive Agreement.
On July 18, 2024, the Investment Manager entered into a Deed of Release and Termination with the Borrower, Regency Assets Designated Activity Company, HSBC Bank plc, TMF Administration Services Limited and The Law Debenture Trust Corporation P.L.C. and other indirect wholly owned subsidiaries of the Company named therein (the “Deed of Termination”) to document the terms of repayment and termination of the Amended & Restated Master Definitions and Framework Deed, originally dated as of August 12, 2010, as amended & restated, as well as certain other ancillary agreements which provided for the securitization of trade receivables generated by the Originators (the “HSBC Facility”).
The foregoing description of the material terms of the Deed of Termination does not purport to be complete and is qualified in its entirety by reference to the complete terms and conditions of the Deed of Termination, a copy of which is filed herewith as Exhibit 10.2 and is incorporated herein by reference.
ITEM 2.03 Creation of a Direct Financial Obligation
The information set forth under Item 1.01 above is incorporated by reference into this Item 2.03.
