BB&T refinanced Synalloy’s asset-based revolving line of credit, increasing the line from $80 million to $100 million and creating a new $20 million five-year term loan.

According to the related 8-K filing, the new term loan will be used to finance the purchase of substantially all of the assets of American Stainless Tubing, with closing scheduled for January 1, 2019. The refinanced line will be used for working capital needs and as a source for funding future acquisitions.

The term loan’s maturity date is January 1, 2024, with interest calculated using the one-month LIBOR rate, plus 1.90%.

The maturity date on the line was extended to December 20, 2021, with interest remaining unchanged. Borrowings under the line will be limited to an amount equal to a borrowing base calculation that includes eligible accounts receivable and inventory.

To update the credit agreement, Synalloy was required to pledge all of its tangible and intangible properties, including the stock and membership interests of its subsidiaries. Covenants under the agreement also include maintaining a minimum fixed charge coverage ratio and a limitation on Synalloy’s maximum amount of capital expenditures per year, which is in line with currently projected needs.

Synalloy’s management does not believe that these covenants and restrictions will have an adverse effect on its operations.

Synalloy is a chemical manufacturing company which operates through two segments: the metals segment and the specialty chemicals segment. The metals segment manufactures stainless steel, other alloy pipe, storage solutions and separation equipment. The specialty chemicals segment manufactures lubricants, surfactants, reaction intermediaries, sulfated fats and oils and chemical tolling manufacturing resources.