TimkenSteel enters restated $400 million asset-based revolver

By Marisa Wong

Los Angeles, Oct. 5 – TimkenSteel Corp. entered into a fourth amended and restated credit agreement on Sept. 30 with JPMorgan Chase Bank, NA as administrative agent to amend and restate its existing secured third amended and restated credit agreement dated Oct. 15, 2019, according to an 8-K filing with the Securities and Exchange Commission.

The amended credit agreement provides for a $400 million asset-based revolving credit facility that matures on Sept. 30, 2027, including a $15 million sublimit for the issuance of commercial and standby letters of credit and a $40 million sublimit for swingline loans.

The company is entitled on up to two occasions to request increases in the commitments in the aggregate principal amount of up to $100 million.

The company is also entitled to request a separate first-in, last-out tranche in an aggregate principal amount of up to $30 million with a separate borrowing base and interest rate margins.

The availability of borrowings under the credit facility is subject to a borrowing base calculation based on a valuation of eligible accounts receivable, inventory and machinery and equipment, each multiplied by an applicable advance rate.

Interest will equal adjusted term SOFR plus an applicable margin of 125 basis points or 150 bps, depending on the company’s average quarterly availability, subject to 0% SOFR floor.

In addition, the company will pay a 25-bps commitment fee on the average daily unused amount of the credit facility.

The credit agreement requires the company to maintain a minimum specified fixed-charge coverage ratio on a springing basis if minimum availability requirements are not maintained.

As of Sept. 30, $5.4 million was outstanding under the credit facility in the form of letters of credit.

The facility will be used to finance working capital, capital expenditures, permitted acquisitions and other general corporate purposes.

JPMorgan and Bank of America, NA are joint bookrunners and joint lead arrangers with BofA as syndication agent.

BMO Harris Bank NA, Huntington National Bank and U.S. Bank NA are co-documentation agents.

TimkenSteel makes tailored steel products and provides supply chain and steel services. The company is based in Canton, Ohio.

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