Itafos entered into an amendment of its existing credit facilities with a syndicate of lenders led by RBC Capital Markets as lead left arranger and administrative agent, with Texas Capital and PNC Capital Markets as joint lead arrangers (JLA), pursuant to which the company will refinance its existing $100 million term loan (with $82.5 million outstanding) and its $30 million letter of credit facility.
The amendment provides for a new commitment of $140 million and a $30 million letter of credit facility and will extend the maturity date under the existing term loan agreement. The company also entered into an amendment to its revolving asset-based credit facility with a syndicate of lenders led by RBC Capital Markets as lead left arranger and administrative agent, with Texas Capital and PNC Capital Markets as joint lead arrangers to extend the maturity date of such facility.
“The amendment and extension of our credit facilities provides enhanced financial flexibility and liquidity for the company as we continue to navigate the current market conditions and execute our strategic initiatives,” David Delaney, CEO of Itafos, said. “We greatly appreciate the continued support of our banking syndicate in providing additional liquidity to the company and partnering with the company in delivering on the business plan. Over the last five years, the company has demonstrated its superior operating performance including deleveraging its balance sheet and enhancing its available liquidity to improve its ability and flexibility to execute on its strategic initiatives and deliver value to its shareholders.”
The key terms of the amended term loan agreement are as follows:
- Extension of maturity date to Sept. 29, 2029.
- Term loan upsized from the existing $100 million (currently $82.5 million outstanding) to $140 million.
- Dedicated letter of credit facility of $30 million.
- Reduction in loan margin of 75 basis points.
- Annual principal amortization is reduced to 5% (Year 1) and 10% Years 2 and 3.
The key terms of the amended ABL agreement are set out below:
- Extension of maturity date to Sept. 29, 2029.
- The proceeds of the amended term loan agreement and amended ABL agreement are expected to be used to refinance the company’s indebtedness under the existing term loan agreement, repayment of all outstanding ABL borrowings, and for general corporate purposes.
- Upon closing the refinancing, the amended term loan will have an outstanding balance of $140 million, the ABL facility will be undrawn, and the LC facility will have an outstanding balance of $12.5 million.
