Novelis entered into a credit agreement with Standard Chartered Bank, as administrative agent and collateral agent, providing $1.8 billion of commitments, which the company borrowed in full on January 13, 2017.
The proceeds of the term loan were used to refinance in full the company’s existing term loan credit agreement dated December 17, 2010, as amended, and Bank of America, as administrative agent and collateral agent and to pay related transaction expenses.
The term loan matures on June 2, 2022, subject to 0.25% quarterly amortization payments. The agreement also requires customary mandatory prepayments with excess cash flow, asset sale and condemnation proceeds and proceeds of prohibited indebtedness, all subject to customary exceptions.
The term loan accrues interest at three or sixth-month, as selected by the company, LIBOR+1.85%, payable at the end of each three or six-month interest period.
The term loan credit agreement allows for additional term loans to be issued in an amount not to exceed $300 million plus an unlimited amount if, after giving effect to such incurrence on a pro forma basis, the senior secured net leverage ratio does not exceed 3.00 to 1.00. The lenders under the agreement have not committed to provide any such additional term loans.