RLPC: Kronos scraps dividend, makes changes

NEW YORK, June 8 Fri Jun 8, 2012 8:36am EDT

NEW YORK, June 8 (Reuters) - Kronos Worldwide Inc has made a second round of investor-friendly changes after increasing the rate and tightening the amortization language on its term loan B late last week, sources told Thomson Reuters LPC.

The issuer has reduced its term loan B to $400 million from $600 million, while also shortening the tenor on the facility to six years from seven years. Additionally, Kronos has scrapped plans to issue a dividend and to repay a European revolver.

Kronos has also increased the rate on its loan for a second time to 475bp over Libor with a 1 percent Libor floor and a discount of 98.5 cents on the dollar. Proceeds will now be used just to refinance debt.

Last week, Kronos bumped up the rate on the term loan B to 425bp over Libor with a 1 percent Libor floor and a discount of 99 cents on the dollar. At launch, the loan was guided at 375bp over Libor with the same Libor floor and discount.

The loan will now amortize at 5 percent per year, up from the original proposal of 1 percent per year. The issuer also added financial covenants to the originally covenant-lite loan. The loan now features a net leverage ratio of 3.5 times. As previously reported, Wells Fargo leads the credit, which is rounded out by a $125 million, five-year revolver. The corporate family rating is Ba2, while the facility rating is Ba3.

Kronos Worldwide Inc is an international producer of titanium dioxide products.