Aluminum rolled products manufacturer Aleris International raised $1.5 billion in new debt financing. Deutsche Bank, New York Branch served as administrative agent on the transaction.
According to a related 8-K filing, Deutsche Bank Securities, Credit Suisse Loan Funding, Barclays Capital, JPMorgan Securities and Merrill Lynch served as joint lead arrangers and joint bookrunners. Citigroup Global Markets, Keybanc Capital Markets, PNC Capital Markets, Suntrust Robinson Humphrey and The Huntington Investment Company acted as co-managers.
The new financing consists of a new senior secured first lien term loan in an aggregate principal amount of $1.1 billion and a newly issued $400 million aggregate principal amount of 10.750% senior secured junior priority notes.
The term loan will mature on February 27, 2023 and includes an uncommitted incremental facility, which provides for additional term loan facilities in an aggregate principal amount of $75 million.
The notes will mature on July 15, 2023 and bear interest at an annual rate of 10.750%. Interest is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2019. The notes are secured by a second-priority lien on the term loan collateral and a third-priority lien on the ABL collateral.
Aleris also amended its existing asset-based revolving credit facility, increasing it from up to $600 million to up to $750 million, subject to applicable borrowing bases. The amendment included an accordion feature, which could increase the facility by up to an additional $350 million.
The ABL amendment extended the maturity date to the earliest of June 25, 2023, the date that is 60 days prior to the scheduled maturity date of the term loans under the term loan or the date that is 60 days prior to the scheduled maturity date of the 2023 notes. It additionally removed a previous borrowing base reserve on Belgian finished goods inventory, permitted the incurrence of the term loan and the 2023 notes and amended certain covenants and other provisions consistent with the corresponding terms of said term loan and notes.
The net proceeds of the new financing will be used to redeem all of the company’s existing senior notes and repay a portion of its outstanding borrowings under the ABL facility, along with related fees and expenses.
