Haynes International ups revolver to $200 million, cuts interest rate

By William Gullotti

Buffalo, N.Y., June 23 – Haynes International, Inc. entered into a third amendment to its revolving credit agreement with JPMorgan Chase Bank, NA as administrative agent on June 20, according to an 8-K filing with the Securities and Exchange Commission.

The third amendment increased the revolver to $200 million from $160 million, subject to a borrowing base and certain reserves.

The amended facility reduced the interest rate by 25 basis points, with borrowings under the amended agreement bearing interest at adjusted daily simple SOFR plus a margin ranging from 200 bps to 250 bps. The margin is determined by the average quarterly availability.

In addition, Haynes must pay a commitment fee of 37.5 bps monthly, in arrears, on the unused portion of the revolver. There is also a 12.5 bps fronting fee for letters of credit.

The revolver matures June 20, 2028.

Haynes will be subject to a covenant pertaining to fixed charge coverage ratios if the amount of excess availability under the revolver is less than the greater of 15% of the maximum credit revolving loan amount and $25 million. The company is permitted to pay dividends and repurchase common stock if certain financial metrics are met and pay quarterly cash dividends up to $3.5 million per fiscal quarter if it is not in default.

Borrowings are collateralized by a pledge of substantially all of the company’s U.S. assets, including the equity interests in its U.S. subsidiaries, but excluding the four-high Steckel rolling mill and related assets, which are pledged to Titanium Metals Corp. per a conversion services agreement.

Borrowings under the agreement are also secured by a pledge of a 100% equity interest in each of the company’s direct foreign subsidiaries.

Haynes is a Kokomo, Ind.-based developer, manufacturer, marketer and distributor of technologically advanced, high-performance alloys, primarily for use in the aerospace, land-based gas turbine and chemical processing industries.

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