Grupo Cementos de Chihuahua  (GCC) completed a new $400 million term loan agreement with its banks. The new agreement replaced all GCC’s existing bank debt, reduced interest expense and improved overall terms and conditions.

JPMorgan Chase, The Bank of Nova Scotia, BBVA Bancomer and Banco Nacional de México led the financing.

The loan has a term of five years, with a variable interest rate spread of 1.25% to 2.0% over LIBOR, based on GCC’s debt/EBITDA ratio. The initial margin will be 1.75%. The agreement also included an unsecured $50 million revolving line of credit.

The refinancing will result in an annualized reduction of interest expense of approximately $10 million.

Luis Carlos Arias, GCC’s chief financial officer, said, “The new bank agreement is another ratification of the decisive steps GCC is taking to grow our business in the U.S. and Mexico and expand margins. The bank refinancing and back-up revolving credit further strengthen GCC’s financial position and improve our financial flexibility.”

The bank refinancing follows the May 2018 upgrade by S&P of GCC’s debt rating to BB+ with a stable outlook and takes place less than one year after GCC refinanced its $260 million senior notes.

Founded in 1941, GCC supplies cement, concrete, aggregates and construction-related services in the U.S. and Mexico, with an annual cement production capacity of 5.1 million metric tons.