Ineos Seeks $850 Million From Note Sale to Refinance Debt

Ineos Group, the world’s largest maker of phenol and nitrile chemicals, plans to sell $850 million in senior secured notes to help refinance debt.

The sale includes U.S. dollar-denominated fixed-rate bonds and floating-rate notes in euros, both due 2019, the Rolle, Switzerland-based chemical maker said in a statement. Ineos has the option to repay the securities early after three years, according to a banker with knowledge of the transaction.

Ineos said it will use the proceeds from the note sale and cash on hand to refinance borrowing built up after years of acquiring the unwanted chemical assets of oil companies including BP Plc. The company had net debt of about 6.1 billion euros ($8 billion) at the end of December. Ineos expects annual earnings before interest, taxes, depreciation and amortization, excluding refining of 1.74 billion euros, leaving it leveraged at 3.5 times.

Ineos has suffered as muted demand for olefins and polymers in parts of Europe offset better demand in North America. The company said Jan. 26 that it’s seen a significant improvement in trading this year compared with the fourth quarter of 2011 and “substantial” sales price increases will be sought for February.

Barclays Capital is managing the sale of the euro notes, while JPMorgan Chase & Co. is overseeing the dollar issue, said the banker, who declined to be identified because terms haven’t been set. Meetings with bond investors start today in London and continue in the U.S. until Feb. 2, the banker said.

The notes will be issued through Ineos Finance Plc and be used to refinance bank debt, the banker said.

Ineos’s cash balances stood at 581 million euros, with 293 million euros in headroom under a revolving credit facility, the company said in last week’s earnings statement.

To contact the reporter on this story: Andrew Noel in London at anoel@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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