AZZ, an independent provider of hot-dip galvanizing and coil coating solutions in North America, successfully repriced its $400 million senior secured revolver due May 2027.
According to a related SEC filing, Citibank served as administrative agent and collateral agent on this transaction, which amended the company’s credit agreement dated May 13, 2022
The repricing reduces AZZ’s interest rate margin on its senior secured revolver across all leveraged-based pricing tiers, which range from SOFR + 275 to 350 basis points and opening up at SOFR + 300 basis points.
The amendment decreased the interest rate margin applicable to the revolving credit loans from 425 basis points to margin ranging from 275 basis points to 350 basis points subject to leverage ratio step-down; reduced the interest rate further by eliminating SOFR loan credit spread adjustment; and reduced the commitment fee applicable to the revolving credit loans by 125 basis points, subject to pricing grid.
The repricing will result in significantly lower interest costs through the maturity of the facility.
“We are pleased to announce the successful completion of our revolver repricing,” Philip Schlom, chief financial officer, said. “Upon closing, AZZ will immediately achieve a 125-basis point reduction in our senior secured revolver borrowing rate and an additional savings of 10 basis points on all borrowings under the facility from the removal of the CSA. There were no other changes to the existing credit agreement. Since acquiring Precoat Metals in May 2022, AZZ has reduced its principal balance and interest rate on its Term Loan B, and the company will continue to focus on lowering its net debt to EBITDA leverage ratio to our targeted range of below 3.0 times.”
