USG restates credit facility to add Canadian unit, lift borrowing limit

By Marisa Wong

Madison, Wis., Oct. 23 – USG Corp. entered into a fourth amendment and restatement agreement on Wednesday with JPMorgan Chase Bank, NA as administrative agent and as JPMorgan Chase Bank, NA, Toronto Branch as Canadian agent, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement amends and restates the company’s third amended and restated credit agreement dated Dec. 21, 2010.

CGC Inc., a wholly owned indirect subsidiary of USG, was added as a Canadian borrower under the facility.

The amendment increases the maximum borrowing limit under the credit agreement to $450 million from $400 million. The limit includes a $50 million sublimit for CGC.

The restated credit agreement allows for the borrowing of revolving loans and issuance of up to $200 million letters of credit, up to $5 million of which can be issued for CGC and its subsidiaries.

The credit agreement also provides for an up to $20 million revolving swingline loan subfacility for USG.

The revolving commitment may be increased, provided that the maximum borrowing amount does not exceed $650 million.

Interest is equal to adjusted Libor (or CDOR for Canadian dollar-denominated loans) plus a margin ranging from 100 basis points to 200 bps. The applicable margins are determined based on the company’s total net leverage ratio.

There is also a letter-of-credit fee equal to the applicable margin with respect to the adjusted Libor and CDOR rate.

In addition, the issuing bank will be entitled to a fronting fee for each letter of credit it issues in an amount equal to 12.5 bps while that letter of credit remains outstanding.

The company is also required to pay a quarterly fee of 0.25% on the average unused amount of revolving commitment.

The credit agreement terminates on Oct. 22, 2019 but includes an earlier termination date that would occur on the 91st day prior to the scheduled maturity of the company’s 2016 and 2018 senior notes unless those notes have either been repaid, defeased in full or their maturity has been extended to a date occurring at least 91 days after the maturity of the credit facility.

The credit agreement contains a financial covenant requiring the company to maintain a minimum fixed-charge coverage ratio of not less than 1 to 1 if excess availability is less than an amount equal to 10% of the lesser of the aggregate revolving commitment and the aggregate borrowing base at that time. The company would be required to continue to comply with that financial covenant until excess availability exceeds the minimum threshold for 30 consecutive calendar days after that.

Upon entering into the restated credit agreement, CGC terminated its credit agreement dated June 30, 2009 with Toronto-Dominion Bank and repaid all amounts under the facility.

The prior facility due June 30, 2015 allowed for revolving loans and up to C$3 million of letters of credit, in an aggregate principal amount not exceeding C$40 million.

USG is a Chicago-based manufacturer and distributor of building systems.

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