Universal Stainless amends financial covenants under credit agreement

By Marisa Wong

Morgantown, W.Va., Oct. 28 – Universal Stainless & Alloy Products, Inc. entered into a fourth amendment to its credit agreement dated Aug. 18, 2011 with PNC Bank, NA as administrative agent on Oct. 23, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

The fourth amendment, which is effective as of Sept. 30, eliminates the leverage ratio covenant for quarters ending after Sept. 30.

In addition, testing under the fixed-charge ratio covenant has been delayed until Sept. 30, 2016.

The amendment also adds a covenant requiring the company to maintain at least $10 million of undrawn availability beginning on Dec. 31.

The amendment modifies a covenant based on the company’s consolidated EBITDA to include additional add-backs of one-time items that occurred in 2015. Under that amended covenant, the company must maintain consolidated EBITDA of $12.4 million, $10.2 million, $10.8 million, $16.8 million and $23.0 million for the four fiscal quarters then ended at Dec. 31, March 31, June 30, 2016, Sept. 30, 2016 and Dec. 31, 2016, respectively.

Universal Stainless is a Bridgeville, Pa.-based manufacturer and marketer of semi-finished and finished specialty steels, including stainless steel, tool steel and certain other alloyed steels.

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