Calumet closes $325 million notes offering

Calumet Specialty Products Partners L.P. announced Jan. 24 the closing of the offering for $325 million 2027 senior unsecured notes. The partnership intends to use the net proceeds from the offering, along with cash on hand, to fund the previously announced redemption of all outstanding 7.75 percent senior notes due 2023 and pay related expenses.

In November, the company announced a partnership with Oaktree Capital Management L.P. in the form of a $300 million convertible term loan investment from Oaktree in Montana Renewables LLC, a wholly owned unrestricted subsidiary of Calumet. Subsequent to that announcement, in early January, it closed on a $50 million investment from Stonebriar Commercial Finance to finance the construction of a renewable hydrogen plant at Montana Renewables to maximize renewable diesel production and further reduce the carbon intensity of Montana Renewables products.

Additionally, Calumet recently announced the amendment and extension of the revolving credit facility. The revolver has been resized at $500 million and the maturity extended for a five-year term ending in January 2027 with advance rates adjusted upward to provide additional liquidity.

“Our ability to raise such significant capital in a short period of time shows the strong investor and capital markets support for Calumet’s transformational vision,” said CEO Steve Mawer. “This capital is being used to deliver on our strategic objectives of de-levering, starting up what we believe will be one of the best renewable diesel businesses in North America and managing our debt maturity schedule. Our notes offering was oversubscribed, and with the closing of the notes offering, we expect Calumet’s capital needs over the next two years will be mostly covered. This allows us to focus on executing our transformation, which we believe will allow us to crystalize significant unitholder value potential in Montana Renewables. We still believe that the most likely way to maximize unitholder value at Montana Renewables is in separate public ownership as a leading pure-play renewables company. Our team continues to examine paths and opportunities which would progress towards that vision.”