Tredegar gets $400 million five-year revolving secured credit facility

By Susanna Moon

Chicago, March 3 – Tredegar Corp. obtained a $400 million five-year revolving secured credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The company entered into the credit agreement on Tuesday with JPMorgan Chase Bank, NA as administrative agent. SunTrust Bank, Citizens Bank of Pennsylvania and PNC Bank, NA are co-syndication agents. U.S. Bank NA, BMO Harris Bank, NA, Bank of America, NA and Wells Fargo Bank, NA are the co-documentation agents.

JPMorgan Chase Bank, SunTrust Robinson Humphrey, Inc., Citizens Bank of Pennsylvania and PNC Capital Markets LLC are the joint bookrunners and joint lead arrangers.

Interest on the loans will initially be Libor plus 250 basis points, with the spread over Libor ranging from 150 bps to 250 bps based on leverage.

The commitment fee ranges from 25 bps to 45 bps.

The agreement provides for revolving credit loans to the company in multiple currencies.

Debt covenants include a maximum leverage ratio of 4 times each quarter on a trailing four-quarter basis and a minimum interest coverage ratio of 2.5 times each quarter on a trailing four-quarter basis.

The agreement restricts payments for dividends and stock repurchases for the life of the agreement at $100 million plus 50% of quarterly consolidated net income. At a leverage ratio of equal to or greater than 3 times, there is a limitation on the payments for the succeeding quarter at the greater of $4 million and 50% of consolidated net income for the most recent fiscal quarter. At a leverage ratio of equal to or greater than 3.5 times, the credit agreement prevents the payments for the succeeding quarter unless the fixed charge coverage ratio is equal to or greater than 1.2 times.

The credit agreement replaces the company’s $350 million revolving unsecured credit agreement with JPMorgan Chase Bank as administrative agent.

The company drew $107 million under the new agreement, with all of the proceeds used to help repay all debt under the old agreement, which was terminated.

Tredegar is a Richmond, Va.-based manufacturer of plastic films and aluminum extrusions.

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