USG restates credit agreement for $220 million increased revolver

By Marisa Wong

Morgantown, W.Va., May 1 – USG Corp. entered into a fifth amendment and restatement agreement on Monday to amend its fourth amended and restated credit agreement dated Oct. 22, 2014, according to an 8-K filing with the Securities and Exchange Commission.

JPMorgan Chase Bank, NA, Bank of America, NA and Wells Fargo Bank, NA are joint lead arrangers and joint bookrunners with JPMorgan Chase Bank as administrative agent, JPMorgan Chase Bank, NA, Toronto Branch as Canadian administrative agent and Bank of America and Wells Fargo Bank as co-syndication agents.

The restated agreement provides for an up to $220 million revolving line of credit, up from $180 million previously. The facility includes a $50 million sublimit for wholly owned indirect Canadian subsidiary CGC Inc.

The facility allows for the issuance of letters of credit, up to a maximum of $70 million outstanding at any time. Of that amount, up to a maximum of $5 million can be issued and outstanding for the Canadian borrower.

The credit agreement also provides for an up to $20 million revolving swingline sub-facility.

Under the restated credit agreement, the maximum principal amount of revolving loans and letters of credit that may be borrowed by or issued in favor of USG at any time may not exceed the lesser of (1) the revolving commitment at that time, less amounts issued to the Canadian borrower, and (2) the excess of (a) a borrowing base equal to (i) the sum of specified percentages of the aggregate eligible trade receivables and inventory of the U.S. loan parties, minus (ii) reserves established from time to time by the administrative agent, minus (b) the amount, if any, by which the Canadian revolving exposure exceeds the Canadian borrowing base.

The maximum principal amount of revolving loans and letters of credit that may be borrowed by or issued in favor of the Canadian borrower at any time may not exceed the lesser of (1) $50 million and (2) the sum of (a) a borrowing base equal to (i) the sum of specified percentages of the aggregate eligible trade receivables and inventory of the Canadian loan parties, minus (ii) reserves established from time to time by the administrative agent, plus (b) the excess, if any, of the U.S. borrowing base, minus the U.S. revolving exposure.

At no time can the sum of the U.S. revolving exposure and the Canadian revolving exposure exceed the $220 million revolving commitment.

The revolving commitment may be increased from time to time up to a total commitment of $450 million. Increases are required to be in minimum increments of $10 million or multiples of $1 million in excess of that. Additionally, the revolving commitment, or the Canadian sublimit, may be reduced from time to time, but not below the U.S. revolving exposure or the Canadian revolving exposure. Any such decreases are required to be in minimum increments of $5 million or multiples of $1 million in excess of that.

Revolving loans denominated in U.S. dollars, made to USG or CGC, will bear interest at Libor plus a margin ranging from 100 to 150 basis points. Revolving loans made to the Canadian borrower in Canadian dollars will bear interest at CDOR plus 100 to 150 bps. The applicable margins are based on excess availability.

The borrowers will also be required to pay a letter-of-credit fee equal to the applicable margin. The applicable issuing bank will be entitled to a fronting fee for each letter of credit of 12.5 bps of the aggregate undrawn face amount.

In addition, the company is required to pay the lenders a quarterly fee at 0.25% per year on the average daily unused amount of the revolving commitment.

Overadvances are allowed but may not exceed $25 million total at any time and may not remain outstanding for more than 30 days. Overadvances bear interest at the alternative Base rate if denominated in U.S. dollars or the Canadian Prime rate if denominated in Canadian dollars plus the applicable margin plus an additional 200 bps.

The revolving loans may be prepaid without premium or penalty. The restated credit agreement is scheduled to terminate on May 1, 2022.

The restated agreement contains a financial covenant requiring the company to maintain a minimum fixed-charge coverage ratio of not less than 1.0 to 1.0 at any time that excess availability is less than an amount equal to 10% of the lesser of (a) the aggregate revolving commitment at that time and (b) the sum of the U.S. borrowing base and the Canadian borrowing base at that time. The company would be required to continue to comply with this financial covenant until excess availability exceeds the minimum amount for 30 consecutive calendar days from that point forward.

As of March 31, the company had $183 million of excess availability, including $50 million for the Canadian borrower, and no borrowings and $37 million of outstanding letters of credit.

USG is a Chicago-based manufacturer and distributor of building products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.