Alpha Metallurgical Resources, a supplier of metallurgical products for the steel industry, refinanced its asset-based revolving credit facility, which was previously set to expire in April 2022. Citibank is serving as administrative agent and collateral agent on the refinancing and BMO and Eclipse Business Capital are serving as co-collateral agents.
The new $155 million facility will mature in December 2024 and includes $125 million of committed availability for letters of credit and another $25 million uncommitted on a cash collateralized basis. Alpha Metallurgical Resources will use proceeds from this ABL for the issuance of letters of credit, working capital and incremental liquidity needs.
“Continuing our efforts to strengthen the company’s balance sheet, we are pleased to close on this refinancing, which amends and extends our ABL until December 2024,” Andy Eidson, president and CFO of Alpha Metallurgical Resources, said. “Though the total capacity is smaller than our prior ABL, this new facility more than covers our letters of credit requirements and provides additional borrowing capacity. Coupled with our plans to continue substantially reducing our long-term debt level, we believe today’s closing is another important step in simplifying our balance sheet and further strengthening the company financially.”
Under the terms of the agreement, interest on letters of credit will be 5.25%. Interest on any loans drawn on the new facility would be calculated using the secured overnight financing rate. The terms of the credit facility include customary representations and warranties, customary affirmative and negative covenants and customary events of default.