Debt | 12. Debt On March 22, 2019, we entered into a consent and amendment to the global senior secured asset-based syndicated revolving credit facility with Wells Fargo Bank, N.A. (the “Wells Fargo Revolver”), and an amendment to our Term Loan Facility. The purpose of each amendment was to, among other things, (i) permit the refinancing of certain existing indebtedness incurred by our South African subsidiaries, Tronox KZN Sands Proprietary Limited and Tronox Mineral Sands Proprietary Limited, and the proposed uses of proceeds thereof, and (ii) implement required provisions in both the Wells Fargo Revolver and Term Loan Facility necessary in connection with establishment of Tronox Holdings plc. On March 25, 2019, our South African subsidiaries entered into an agreement for a revolving credit facility (the “Standard Bank Revolver”) and a new term loan facility (the “Standard Bank Term Loan”) with The Standard Bank of South Africa Limited as discussed below. Wells Fargo Revolver On September 22, 2017, we entered into a the Wells Fargo Revolver which provided us with up to $550 million of revolving credit lines, with an $85 million sublimit for letters of credit, and has a maturity date of September 22, 2022. Our availability of revolving credit loans and letters of credit is subject to a borrowing base. The Wells Fargo Revolver amendment discussed above also modified certain components of the borrowing base in order to increase the potential availability of credit under the Wells Fargo Revolver. We also voluntarily reduced the revolving credit lines under the Wells Fargo Revolver from $550 million to $350 million. As a result of this modification, we accelerated the recognition of a portion of the deferred financing costs related to the Wells Fargo Revolver and during the three months ended March 31, 2019, recorded a charge of $2 million in “Loss on extinguishment of debt” within the unaudited Condensed Consolidated Statement of Operations. On March 29, 2019, we borrowed $80 million under the Wells Fargo Revolver, and also had $21 million of issued and undrawn letters of credit under the Wells Fargo Revolver, which remained outstanding at March 31, 2019. There were no balances outstanding at December 31, 2018. ABSA Revolving Credit Facility On December 13, 2017, our South African subsidiaries entered into an agreement for a revolving credit facility with ABSA Bank Limited (“ABSA”) acting through its ABSA Capital Division for an amount up to R750 million (approximately $52 million at December 31, 2018 exchange rate) maturing on December 13, 2020 (the “ABSA Revolver”). In connection with the Standard Bank Revolver entered into on March 25, 2019, discussed below, the ABSA Revolver was terminated on March 26, 2019. As a result of the termination, we accelerated the recognition of the remaining deferred financing costs related to the ABSA Revolver during the three months ended March 31, 2019.and recorded less than $1 million in “Loss on extinguishment of debt” within the unaudited Condensed Consolidated Statement of Operations. Standard Bank Credit Facility On March 25, 2019, our South African subsidiaries entered into the Standard Bank Revolver for an amount up to R1 billion (approximately $69 million at March 31, 2019 exchange rate) maturing on March 25, 2022. The Standard Bank Revolver bears interest at the Johannesburg Interbank Average Rate (“JIBAR”) plus 260 basis points when net leverage for our South African subsidiaries (total combined debt outstanding under the Standard Bank Revolver and Standard Bank Term Loan less cash and cash equivalents divided by the consolidated EBITDA) is less than 1.5 and JIBAR plus 285 basis points when net leverage is greater than 1.5. At March 31, 2019, we had R200 million (approximately $14 million at March 31, 2019 exchange rate) in outstanding borrowings on the Standard Bank Revolver. Standard Bank Term Loan Facility On March 25, 2019, our South African subsidiaries, Tronox KZN Sands Proprietary Limited and Tronox Mineral Sands Proprietary Limited, entered into the Standard Bank Term Loan with a maturity date of March 25, 2024. The Term Loan Facility consists of (i) an aggregate principal amount of R2.6 billion (approximately $180 million at March 31, 2019 exchange rate) (“Amortizing Loan”) the principal of which will be paid back at 5 percent per quarter over the five year term of the loan, and (ii) an aggregate principal amount of R600 million (approximately $42 million at March 31, 2019 exchange rate) (“Bullet Loan”) the principal of which will be paid back at the maturity date of the Standard Bank Term Loan. The Amortizing and Bullet Loans bear interest at JIBAR plus 260 basis points and 295 basis points when net leverage South African subsidiaries is less than 1.5 and JIBAR plus 285 basis points and 315 basis points when net leverage is greater than 1.5, respectively. Long-term Debt Long-term debt, net of an unamortized discount and debt issuance costs, consisted of the following: Original Principal Annual Interest Rate Maturity Date March 31, 2019 December 31, 2018 Term Loan Facility, net of unamortized discount (1) (2) $ 2,150 Variable 9/22/2024 $ 2,019 $ 2,119 Senior Notes due 2025 450 5.75 % 10/01/2025 450 450 Senior Notes due 2026 615 6.50 % 4/15/2026 615 615 Standard Bank Term Loan Facility 222 Variable 03/25/2024 222 — Finance leases 15 16 Long-term debt 3,321 3,200 Less: Long-term debt due within one year (58 ) (22 ) Debt issuance costs (40 ) (39 ) Long-term debt, net $ 3,223 $ 3,139 (1) Average effective interest rate of 5.6% and 5.5% during the three months ended March 31, 2019 and 2018, respectively. (2) The Term Loan Facility consists of (i) a U.S. dollar term facility in an aggregate principal amount of $1.5 billion (the “Term Loans”) with our subsidiary, Tronox Finance LLC (“Tronox Finance”) as the borrower and (ii) a U.S. dollar term facility in an aggregate principal amount of $650 million (the “Blocked Term Loan”) with our unrestricted subsidiary, Tronox Blocked Borrower LLC (the “Blocked Borrower”) as the borrower, which Blocked Term Loan was funded into a blocked account. Upon consummation of the Cristal Transaction on April 10, 2019, the Blocked Borrower merged with and into Tronox Finance, and the Blocked Term Loan became available to Tronox Finance. In the event of an asset sale, some or all of the net proceeds from the sale may be required to be used to prepay borrowings under the Term Loan Facility based on the ratio of the total combined debt outstanding under the Term Loan Facility and the Wells Fargo Revolver to the consolidated EBITDA, as defined in the Term Loan Facility, for the previous four quarters. If this ratio is greater than 3, then all of the net proceeds from an asset sale would be required to be used to prepay borrowings under the Term Loan Facility, while if the ratio were less than 3 but greater than 2.75, 50% of the net proceeds would be required for prepayment and if the ratio were less than 2.75, no prepayment would be required. |