TimkenSteel enters $300 million restated revolving credit facility

By Marisa Wong

Morgantown, W.Va., Feb. 1 – TimkenSteel Corp. entered into a second amended and restated credit agreement on Jan. 26 for a $300 million asset-based revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

JPMorgan Chase Bank, NA and Bank of America, NA are joint bookrunners and lead arrangers with JPMorgan as administrative agent, Bank of America as syndication agent and BMO Harris Bank NA and U.S. Bank NA as co-documentation agents.

The credit agreement amends and restates the company’s existing secured amended and restated credit agreement dated Dec. 21, 2015.

The amended credit facility includes a $15 million sublimit for the issuance of commercial and standby letters of credit and a $30 million sublimit for swingline loans.

The company may, on up to two occasions, request increases in the commitments, up to a total of $50 million.

Availability of borrowings is subject to a borrowing base, calculated based on eligible accounts receivable, inventory and machinery and equipment. Availability may be further modified by reserves established from time to time by the administrative agent.

The credit facility matures on Jan. 26, 2023. Prior to maturity, amounts outstanding are required to be repaid with proceeds from asset sales, equity or debt issuances or casualty events.

Borrowings bear interest at Libor plus an applicable margin, ranging from 200 basis points to 250 bps, based on the company’s average quarterly availability. The applicable margin is initially 200 bps.

In addition, the company will pay a commitment fee of 37.5 bps or 50 bps on the average daily unused amount, depending on average daily availability for the most recently completed calendar month.

As of Jan. 26, $112.6 million was outstanding under the credit facility in the form of loans and letters of credit.

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

All of the debt under the facility is guaranteed by the company’s material domestic subsidiaries and is secured by substantially all of the company’s personal property.

In addition, the credit agreement requires the company to conditionally maintain minimum liquidity during the period from March 1, 2021 to June 1, 2021 and maintain a minimum specified fixed-charge coverage ratio on a springing basis if minimum availability requirements are not maintained.

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

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