A. M. Castle, a global distributor of specialty metal and supply chain solutions, executed commitment letters with PNC Bank for a $125 million senior-secured revolving ABL credit facility and an $85 million senior secured, revolving debtor-in-possession credit facility.

The ABL facility will close when Castle completes its prepackaged financial restructuring later this summer and will be utilized, in part, to repay certain existing debt. The $85 million DIP facility will be used as needed during the company’s restructuring.

The closing of the new ABL facility and the DIP facility are each subject to the closing conditions set forth in the respective commitment letters, which expire later this summer.

“We believe that reaching these agreements with PNC, an established lender to the metals industry, will be extremely advantageous to Castle as we complete our financial restructuring, allowing us to emerge a financially stronger company,” Executive Vice President and Chief Financial Officer Patrick Anderson said. “PNC’s commitment to providing working capital at competitive rates will significantly reduce our cost of capital resulting in substantial cash interest savings of at least 70% from our current annualized rate of approximately $36 million which will help us deliver on our promise of growing our partnerships with our vendors and improving our service to our customers.”

As previously announced, the company has solicited votes on its proposed prepackaged joint Chapter 11 plan of reorganization. The plan, supported by the company’s existing liquidity and the DIP facility, provides that the company will continue to operate business as usual.

Castle expects to complete its restructuring proceedings later this summer, upon which the ABL facility will be used to refinance certain existing secured debt, borrowings under the DIP facility and to provide additional capital as it emerges from bankruptcy protection.