Algoma Steel, a Canadian producer of hot and cold rolled steel sheet and plate products, upsized its senior secured asset-based revolving credit facility from $250 million to $300 million and extended the term of the ABL credit facility to May 2028.

Wells Fargo Capital Finance Canada is acting as the administrative agent for the facility while acting alongside BMO as joint lead arranger and joint bookrunner. Goodmans represented Algoma in the transaction.

The interest rate on the ABL credit facility will be based on the secured overnight financing rate (SOFR) plus a credit spread adjustment of 10 basis points plus an applicable margin, which will vary depending on usage.

“With this new ABL credit facility, we have strengthened our liquidity, extended the maturity out five years and increased our financial flexibility,” Rajat Marwah, CEO of Algoma, said. “The financial terms reflect Algoma’s prudent financing strategy and strength of our business and cash flow profile through market cycles. We remain laser-focused on creating and delivering long-term shareholder value as we execute our transition to electric arc steelmaking to become one of North America’s leading providers of green steel.”

With the closing of this transaction, Algoma has approximately $260 million of unused availability on the ABL credit facility with existing usage primarily related to letters of credit. The ABL credit facility can be used to fund working capital needs, general corporate purposes and strategic growth initiatives.