Tronox Holdings closes $400 million senior secured notes offering due 2030

Tronox Holdings plc (NYSE:TROX) announced Friday that its wholly owned indirect subsidiary, Tronox Incorporated, has completed an offering of $400 million aggregate principal amount of 9.125% senior secured notes due 2030. The notes were issued at par and are guaranteed by Tronox Holdings and certain of its restricted subsidiaries, according to a statement filed with the Securities and Exchange Commission. This new offering adds to Tronox’s existing debt burden of $3.19 billion, as reported in recent financial statements. According to InvestingPro analysis, the company currently trades at an attractive valuation, with multiple indicators suggesting the stock may be undervalued relative to its fundamentals.

Interest on the notes is payable semi-annually on March 31 and September 30 of each year, beginning March 31, 2026. The notes are scheduled to mature on September 30, 2030, but may mature earlier if the company’s 4.625% senior unsecured notes due 2029 have more than $250 million outstanding 91 days prior to their stated maturity.

The indenture governing the notes includes provisions that limit, under certain circumstances, the ability of Tronox Incorporated, Tronox Holdings, and their restricted subsidiaries to incur secured debt, take on indebtedness at non-guarantor subsidiaries, engage in certain sale-leaseback transactions, or merge, consolidate, or sell substantially all assets. These debt covenants come at a crucial time, as InvestingPro data shows the company’s debt-to-equity ratio stands at 1.94, with an Altman Z-Score of 0.98 indicating potential financial stress. While the company maintains a healthy current ratio of 2.1, recent data shows negative free cash flow of $255 million, suggesting careful monitoring of financial health is warranted.

The notes provide for customary events of default, including nonpayment of principal or interest, breaches of covenants, certain payment defaults on other indebtedness, failure of guarantees, and specified bankruptcy or insolvency events. If an event of default occurs and is not remedied within the specified period, the trustee or holders of at least 30% of the outstanding notes may declare all notes due and payable immediately.

The company may redeem the notes before September 30, 2027 at 100% of principal plus a make-whole premium and accrued interest. After that date, the notes are redeemable at specified premiums that decrease over time, reaching par value from September 30, 2029. Additionally, up to 40% of the notes may be redeemed at a premium following certain equity offerings before September 30, 2027, and up to 10% of the notes may be redeemed each year at a 3% premium before that date. In the event of certain changes of control, Tronox must offer to purchase the notes at 101% of principal plus accrued interest.

The notes were offered and sold in reliance on exemptions from registration under Rule 144A and Regulation S of the Securities Act of 1933.

This summary is based on a press release statement filed with the SEC. For investors seeking deeper insights into Tronox’s financial position and future prospects, InvestingPro offers comprehensive analysis through its Pro Research Report, available as part of the subscription covering 1,400+ US equities. The report includes detailed financial health scores, valuation metrics, and expert analysis that goes beyond traditional financial statements.

In other recent news, Tronox Holdings PLC reported its second-quarter 2025 financial results, which fell short of analyst expectations. The company posted an earnings per share (EPS) of -$0.28, significantly missing the anticipated -$0.04, and reported revenue of $731 million, below the expected $790.22 million. In another development, Tronox announced that its subsidiary priced an offering of $400 million in senior secured notes at 9.125%, due in 2030. The proceeds from these notes are intended to repay existing borrowings and cover related expenses, with any remaining funds going toward general corporate purposes.

Additionally, Mizuho downgraded Tronox’s stock from Neutral to Underperform, citing an "unwarranted" stock price surge of approximately 55% since the last quarterly report and dividend cut. The firm set a price target of $4.00, suggesting a potential downside. Furthermore, Julie Beck, a member of Tronox’s Board of Directors, announced her resignation effective September 30, 2025, due to her new role as Senior Vice President, Chief Financial Officer, and Treasurer of MSA Safety Incorporated. These developments highlight significant changes and challenges for Tronox Holdings PLC.

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