Resolute Forest Products reset the five-year maturity of its senior secured asset-based revolving credit facility with an aggregate lender commitment of up to $450 million at any time outstanding, subject to borrowing base availability based on specified advance rates, eligibility criteria and customary reserves. The facility also includes an environmental, social and governance (ESG) module, with targets to be agreed upon with the bank syndicate, which, upon activation, will impact ABL pricing.
A syndicate of six banks provided the ABL credit facility, with Bank of America as administrative agent and collateral agent. Bank of America, Wells Fargo and Bank of Montreal acted as joint lead arrangers and joint book runners, while CIBC and TD acted as co-documentation agents.
“This successful extension improves certain terms and conditions and supports the execution of our growth and transformation initiatives for the future. Our new ESG module also demonstrates our commitment to delivering value for our shareholders while driving economic activity in a sustainable and responsible way,” Remi G. Lalonde, president and CEO of Resolute Forest Products, said.
“By renewing and extending the ABL through December 2026, we are taking advantage of our strong financial position and of attractive bank market conditions to lock in a competitive source of liquidity for the long term,” Sylvain A. Girard, senior vice president and CFO of Resolute Forest Products, said.
The ABL facility is completely undrawn, with the exception of approximately $73 million of ordinary course letters of credit outstanding. The extension of the ABL credit facility includes multiple modifications, including a LIBOR transition. The $450 million facility includes a $250 million tranche available to Resolute Forst Products’ U.S. borrowers and its Canadian borrowers, as well as a $200 million tranche available only to its U.S. borrowers, in each case subject to the borrowing base availability of those borrowers. The facility also includes a $60 million swing line sub-facility and a $200 million letter of credit sub-facility. The credit agreement also provides for an uncommitted ability to increase the revolving credit facility by up to $500 million, subject to certain terms and conditions.
The credit agreement for the ABL facility contains customary covenants, representations and warranties and events of default for asset-based credit agreements of this type. Resolute Forst Products’ obligations under the facility are guaranteed by certain material subsidiaries and are secured by first priority liens on accounts receivable, inventory and related assets.
Troutman Pepper Hamilton Sanders and McCarthy Tétrault represented Resolute.
