TMS International Completes New Debt Refinancing
TMS International Corp. announced that its wholly owned subsidiary, Tube City IMS Corporation, a provider of outsourced industrial services to steel mills globally, has successfully completed the refinancing of its debt structure by entering into a new $300 million senior secured term loan.
The new seven-year loan carries a rate of LIBOR plus 4.50% with a LIBOR floor of 1.25%, and was issued at a price of 99% of par value. The term loan complements the company’s five-year, $350 million asset-backed multi-currency revolving credit facility entered into in December 2011.
Proceeds from the term loan, along with a draw on the ABL facility and cash from TMS’ balance sheet, are being used to repay the company’s existing term loan, which was scheduled to mature in January 2014, and to discharge and redeem the company’s 9 3/4% Senior Subordinated Notes due February 1, 2015.
The company expects the refinancing transactions to provide approximately $8.5 million of annual cash interest savings, to increase its after-tax earnings by approximately $6 million, and to contribute to lowering its effective tax rate to approximately 32% in 2012.
“We are very pleased to close this new credit facility. The completion of this refinancing together with the recent placement of our ABL facility not only ensures that we will have the financial resources to execute our growth strategies, but it reduces our interest expense and increases our earnings per share,” said Daniel Rosati, TMS EVP and CFO.
TMS International Corp., through its subsidiaries, including Tube City IMS Corporation, is a provider of outsourced industrial services to steel mills in North America as measured by revenue and has a substantial and growing international presence.
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