Summary
On September 30, 2019, Allegheny Technologies Incorporated (ATI) announced a significant amendment and restatement of its credit facilities. The newly established First Amended and Restated Revolving Credit, Term Loan, Delayed-Draw Term Loan and Security Agreement extends the company's borrowing capacity through September 30, 2024. This agreement provides ATI with a $100 million term loan and a $500 million revolving credit facility, offering substantial liquidity for its ongoing operations and strategic initiatives. The amendment also introduces a delayed-draw term loan of up to $100 million and the potential for an additional $200 million under the revolving credit facility, subject to lender discretion. The company's obligations are secured by its accounts receivable and inventory, and guaranteed by certain domestic subsidiaries. The revised credit agreement includes financial covenants, such as a minimum fixed charge coverage ratio under specific default or low availability scenarios, and minimum liquidity requirements leading up to the maturity of certain outstanding notes.
Key Highlights
- 1ATI entered into an Amended and Restated Credit Agreement extending through September 30, 2024.
- 2The new agreement includes a $100 million term loan and a $500 million revolving credit facility.
- 3A delayed-draw term loan of up to $100 million is available through June 30, 2020.
- 4The company has the option to request an increase of up to $200 million in the revolving credit facility.
- 5Obligations under the credit agreement are secured by accounts receivable and inventory.
- 6A financial covenant requires a fixed charge coverage ratio of at least 1.00:1.00 under certain conditions.
- 7Minimum liquidity must be demonstrated in the 90 days preceding the maturity of specific notes.