Tree Island Steel renewed its five-year senior secured revolving facility with Wells Fargo Capital Finance, increasing the facility to $80 million with a $60 million revolver and a $20 million term loan. The funding will be used for financing existing machinery and equipment and future capital expenditures.

Under the terms of the facility, interest will be charged at variable rates based on the Canadian and/or U.S. prime rate and the applicable benchmark interbank rate. Borrowings under the revolver may be in Canadian and/or U.S. dollars, with the amount advanced under the facility limited to a defined percentage of inventories, accounts receivable and real estate, less certain reserves. Term debt may also be borrowed as Canadian and/or U.S, dollars. The existing term debt will be rolled into a new term loan, with up to $10 million available to finance future capital expenditures.

The facility was secured by a first charge over Tree Island’s assets, supported by guarantees and pledges, and required certain covenants be met by Tree Island.

“This renewed credit facility provides Tree Island with prudent and effective use of funds for the working capital and expansion capital needs of Tree Island,” said Amar Doman, chairman of the board of directors of Tree Island.

Founded in 1964 and headquartered in British Columbia, Tree Island Steel produces wire products for a diverse range of industrial, residential construction, commercial construction and agricultural applications.