Russel Metals gets C$252.5 million amended, restated credit facility

By Sara Rosenberg

New York, May 4 - Russel Metals Inc. closed on a C$252.5 million amended and restated credit facility due April 29, 2011, according to a news release.

Covenants include a fixed-charge coverage ratio requirement of 1.1 to 1.

The facility provides for an adjustment to earnings used in the fixed-charge coverage ratio for up to $200 million of non-cash inventory write-downs and any write-down of goodwill and intangible balances currently on the balance sheet.

"We believe that the increased availability and the amendments to our fixed-charge coverage ratio provide sufficient liquidity to allow us to pay a dividend and manage our operations through this business cycle. We will report an inventory write-down for a portion of the $200 million in the first quarter of 2009; however, we do not anticipate utilizing the adjustment to the fixed charge coverage ratio until the second half of the year," said Marion Britton, vice president and chief financial officer, in the release.

Closing on the deal took place on May 1.

Russel Metals is a Mississauga, Ont.-based metals distribution company.

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