Itafos Inc., Houston, on Sept. 22 announced that it has 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 a US$85 million term loan to the company and made available a US$35 million letter of credit (LC) facility and an US$80 million asset-based revolving credit facility (ABL).
Itafos said that together, the new credit facilities will provide enhanced financial flexibility and 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,” said G. David Delaney, Itafos CEO.
The term loan, LC, and ABL all mature on Sept. 22, 2025. Upon closing the refinancing, the term loan will have an outstanding balance of US$85.0 million, the ABL US$65.0 million, and the LC US$32.8 million.
Interest shall accrue on outstanding borrowings at a rate equal to Term SOFR on the term loan and LC, plus a margin ranging from 4.25%-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%.
ABL interest shall accrue on outstanding borrowings at a rate equal to Term SOFR plus a margin ranging from 2.25%-2.75% per annum, based upon the average excess availability under the ABL.
Previous interest rates ranged from 8.25% per annum plus LIBOR to 18%.