Nalco Holding unit calls for redemption of notes

AP News
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Posted: Nov 30, 2009 4:30 PM

Nalco Holding Co., a maker of water treatment chemicals, said Monday its Nalco Co. subsidiary is looking to pay back its $190 million worth of senior notes due November 2011 early.

The move will save almost $15 million in annual interest, the company said. The redemption of the 7.75 percent senior notes is effective Dec. 28.

"We have generated record free cash flow this year and retiring this debt early is consistent with the company's stated intentions of reducing its leverage," said Chief Financial Officer Bradley J. Bell in a statement.

The company said it decided to redeem this higher-cost debt first instead of retiring a lower interest $167 million term loan that comes due next year. Nalco said it expects future cash flow and other resources will be sufficient to pay that loan back on schedule.

Shares of the company rose 46 cents to close at $24.46.