Trex enters restated $400 million five-year revolver

By Marisa Wong

Los Angeles, May 20 – Trex Co., Inc. as borrower and Trex Commercial Products, Inc. (TCP) as guarantor entered into a credit agreement on May 18 to amend and restate their fourth amended and restated credit agreement dated Nov. 5, 2019, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement provides the company with one or more revolving loans in a collective maximum principal amount of $400 million throughout the term, which ends May 18, 2027.

The previous agreement had a limit of $250 million from Jan. 1 through June 30 of each year and a limit of $200 million from July 1 through Dec. 31 of each year throughout the term, which would have ended on Nov. 5, 2024 if not replaced by the new credit agreement. Under the first amendment to the prior credit agreement dated as of May 26, 2020, the lenders had agreed to provide an additional $100 million line of credit through May 26, 2022.

Included within the new $400 million loan limit are sublimits of $60 million for letters of credit and $20 million for swingline loans.

Borrowings bear interest at term SOFR plus an applicable rate based on the ratio of consolidated debt to consolidated EBITDA. The spread ranges from 80 basis points to 180 bps.

There is also a fee that ranges from 8 bps to 20 bps, depending on the consolidated ratio.

After the closing date, the company and BofA Securities, Inc., as a sustainability coordinator, will be entitled to establish specified key performance indicators (KPIs) with respect to certain environmental, social and governance targets of the company and its subsidiaries. The sustainability coordinator and the company may amend the Credit Agreement and ancillary definitive agreement Based on the performance of the company and its subsidiaries against the KPIs, some adjustments to otherwise applicable pricing will be made; provided that the amount of those adjustments will not exceed specified aggregate caps as in the loan documentation.

BofA Securities, Inc. is lead arranger and bookrunner. The lenders include Bank of America, NA as administrative agent, swingline lender and letter-of-credit issuer; Wells Fargo Bank, NA as syndication agent; Regions Bank; PNC Bank, NA; and TD Bank, NA.

As a result of the transaction and excluding legal and accounting fees, the company incurred closing fees equal to $862,806.23, the filing noted.

Loan proceeds are earmarked for raising working capital and supporting general business operations.

Trex is a Winchester, Va.-based manufacture of wood-alternative decking, railings and other outdoor items.

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