Specialty chemicals manufacturer Stepan will use the proceeds from an US$100 million offering of 3.95 percent Senior Notes, due in 2027, to fund capital expenditures and pay off existing high-cost debt.
Scott Beamer, Vice President and Chief Financial Officer, explained: “Once our long-term debt that is due in 2015 is paid off, over 60 percent of our remaining debt will be at rates less than 4 percent. The weighted average cost of our long-term debt in 2016 will be 4.4 percent, enabling us to continue to make investments that support our strategic initiatives.”
The company recently signed a long-term supply agreement with The Sun Products Corporation to supply Sun Products’ anionic surfactant requirements in North America from the third quarter of 2015. Stepan will also purchase select chemical manufacturing assets from Sun Products’ Pasadena site in Texas and has a two-month purchase option on Sun Products’ Pasadena property.
Stepan’s results for the second quarter of 2015 are due to be announced on July 22, 2015.