Danimer Scientific, a biopolymer producer for biodegradable plastics, has secured a senior-secured term loan of USD 130 million, arranged by investment bank Jefferies, with an annual interest rate of 14.4%, secured by the company's assets and backed by collateral protection insurance arranged by AON (a global professional services firm). 

Danimer is looking to use the funds to expand the company's capital structure, enhance its liquidity position in the near term, and provide greater strategic and operational flexibility to execute its growth strategy. The loan resulted in net proceeds of USD 98.6 million, with USD 12.5 million to be held in a restricted reserve account for future interest payments. As a result, the company has gained a net increase of USD 86.1 million in liquidity to support its general corporate purposes after the transaction fees and expenses.

The term loan includes a stipulation for maintaining a minimum liquidity level, which will be lifted once the company secures the required consent for one of its subsidiaries to serve as a guarantor for the loan. The company anticipates obtaining this consent within a timeframe of around 45 days. The company has also issued a warrant to Jefferies to purchase 1.5 million shares of its Class A common stock at USD 7.50 per share. 

The Term Loan will reach maturity on either March 17, 2027, or September 15, 2026, if more than USD 100 million in principal amount of Danimer's existing convertible notes is still outstanding on that particular date.

Analyst QuickTake: Danimer Scientific is working on raising the necessary capital to fuel its growth strategy. Earlier this year, the company signed a memorandum of understanding with Hyundai Oilbank for the development of polyhydroxyalkanoate (PHA) for the South Korean market. The company had also announced plans to invest USD 700 million to build a two million sq ft facility in Georgia to expand the production of biobased PHA.