PureCycle changes timeline and terms in bond indenture

PureCycle Technologies (PCT) amended the indenture and loan agreement for its Series 2020A, B and C bonds last month, pushing the project completion date back through 2029 and changing its definition of majority bondholders, among other changes.

The Southern Ohio Port Authority issued the three series of bonds in 2020 on behalf of PureCycle (PCT) for its Ironton, Ohio, plastic recycling project.

In 2024, PureCycle (PCT) bought out bondholders and then resold the paper. Construction delays and a dispute with a contractor had earlier triggered a bond default designation.

The Series 2020A exempt facility revenue bonds are tax-exempt; the Series 2020B and 2020C bonds are subordinate, with the Series 2020B bonds also tax-exempt and the Series 2020C bonds taxable.

The seventh supplemental indenture, as executed and delivered on Dec. 26, sets the project's outside completion date as Dec. 31, 2029, PureCycle (PCT) said in a Dec. 29 disclosure notice posted to the Municipal Securities Rulemaking Board's EMMA website.

It also changes the definition of "majority holders" to mean the holders of a majority in aggregate principal amount of the senior bonds outstanding, or, if no senior bonds are outstanding, the holders of a majority in aggregate principal amount of the remaining bonds outstanding.

The fifth supplemental indenture had defined "majority holders" to mean the holders of 75% in aggregate principal amount of the senior bonds then outstanding. That had meant that PureCycle Technologies (PCT) alone no longer constituted the majority holder.

The seventh supplemental indenture also alters the threshold of holders required to consent to the execution of supplemental indentures, to the holders of a majority in aggregate principal amount of outstanding senior bonds.

It shifts to fiscal year 2030 the point at which certain financial covenants begin to apply, including by amending the loan agreement so that PureCycle (PCT) is barred from making any distributions on any of its membership interests until Jan. 1, 2030. (However, contributions from any member of the company or affiliate of a company member are excluded from those calculations.)

And it amends the limited waiver and second supplemental indenture to allow for the disbursement to the guarantor, PureCycle Technologies (PCT), of investment earnings and profits from the liquidity reserve escrow fund.

In the company's third quarter earnings call, CFO Jaime Vasquez said PureCycle (PCT) still held $87 million of revenue bonds that it planned to sell to support growth initiatives.

Also, "we have almost $25 million warrants outstanding that expire in March of 2026, (and) must exercise at a price of $11.50 per warrant prior to that time," he said. "In addition to the potential proceeds from the warrants, our team is pursuing other nondilutive financing arrangements."

CEO Dustin Olson said a compounding expansion at the Ironton, Ohio, project was on track for mechanical completion in December and set to lower costs and reduce the complexity of their supply chain.

He also pointed to plans to add a third operations shift in the near future, which he said will help the Ironton facility ramp up to higher rates of production in future quarters.

"Given our technical successes and the product line that we've developed, we feel confident about the long-term demand for Ironton," he said.

A spokesman for PureCycle (PCT) did not respond to requests for comment.

PureCycle (PCT) stock trades on NASDAQ. It was at $9.42 a share at midday Wednesday. It traded between $5.40 and $17.37 during 2025.