Vulcan enters $1 billion five-year revolving, term loan facilities

By Marisa Wong

Morgantown, W.Va., Dec. 22 – Vulcan Materials Co. entered into a new credit agreement on Wednesday for a five-year $750 million unsecured revolving credit facility and a five-year $250 million unsecured delayed-draw term loan facility, according to an 8-K filing with the Securities and Exchange Commission.

SunTrust Robinson Humphrey, Inc. is the left lead arranger and bookrunner with Wells Fargo Securities, LLC and U.S. Bank NA as joint lead arrangers and bookrunners. SunTrust Bank is administrative agent, U.S. Bank and Wells Fargo Bank, NA are co-syndication agents, and Bank of America, NA and Regions Bank are co-documentation agents.

Loans bear interest at Libor plus an applicable margin ranging from 100 bps to 175 bps, depending on ratings. There is also a commitment fee that ranges from 10 bps to 25 bps, depending on ratings.

The credit agreement contains a negative covenant limiting the company’s ability to incur secured debt and the following financial covenants: a maximum debt to EBITDA ratio of 3.50 to 1.00 (with a permitted step-up to 3.75 to 1.00 for three fiscal quarters ending after the consummation of material acquisitions) and a minimum EBITDA to interest expense ratio of 3.00 to 1.00.

The credit facilities are guaranteed by the company’s significant subsidiaries. Proceeds will be used for general corporate purposes.

Also on Wednesday, Vulcan terminated its $750 million unsecured revolving credit agreement dated June 19, 2015 with SunTrust Bank as administrative agent.

Vulcan makes construction materials and is based in Birmingham, Ala.

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