Itafos entered into credit facilities with a syndicate of lenders led by RBC Capital Markets, as sole bookrunner and sole lead arranger, pursuant to which the lenders have advanced an $85 million term loan to the company and made available a $35 million letter of credit facility and an $80 million asset-based revolving credit facility. Together, the new credit facilities will provide Itafos with enhanced financial flexibility, a non-dilutive source of capital as well as the ability to refinance its existing debt.

“The refinancing announced today represents the achievement of another important strategic milestone for the company. The new debt facilities will improve the company’s financial performance because of the significantly reduced interest rates and creates more flexibility for funding of the long-term growth of the business,” G. David Delaney, CEO of Itafos, said.

The key terms of the term loan and LC facility are:

• The term loan is secured by the assets of the company and its U.S. subsidiaries and will mature on Sept. 22, 2025.
• Interest shall accrue on outstanding borrowings at a rate equal to term SOFR plus a margin ranging from 4.25% to 5.25% per annum based upon the total net leverage ratio of the company and its subsidiaries. The initial borrowings are at a rate of 4.25%.
• The term loan requires quarterly amortization payments and the company may make incremental prepayments of the term loan borrowings without penalty or premium.

The key terms of the ABL facility are:

• The ABL facility will mature on Sept. 22, 2025. It is secured by the assets of the company and its U.S. subsidiaries and guaranteed by certain of the company’s U.S. subsidiaries.
• Interest shall accrue on outstanding borrowings at a rate equal to term SOFR plus a margin ranging from 2.25% to 2.75% per annum, based upon the average excess availability under the ABL facility.
• The term loan, LC facility and ABL facility are subject to customary conditions precedent, representations and warranties, financial and other covenants and events of default.

The proceeds of the term loan and ABL facility will be used to refinance the company’s indebtedness under the existing term loan from Oaktree Capital Management, which carried an interest rate of 8.25% per annum + LIBOR, the company’s existing revolving credit agreement from JPMorgan Chase Bank, and under the promissory note issued to CL Fertilizers Holding which had an interest rate of 18% per annum that was payable in kind. The refinancing provides for the retiring of all related party debt. Proceeds from the ABL facility will also be used for working capital and general corporate purposes.

Upon closing the refinancing, the term loan will have an outstanding balance of $85 million, the ABL facility will have an outstanding balance of $65 million, and $32.8 million will be outstanding under the LC facility.