Real Alloy gets $110 million revolver from GE Capital, Wintrust

By Marisa Wong

Madison, Wis., March 5 – Real Alloy Recycling, Inc., a subsidiary of Real Alloy Holding, Inc. and formerly known as Aleris Recycling, Inc., and Real Alloy Canada Ltd. entered into a revolving credit agreement on Feb. 27 with General Electric Capital Corp. and Wintrust Bank for a $110 million senior secured revolving asset-based credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Under the asset-based revolver, GE Capital has committed to lend $95 million, and Wintrust Bank has committed to lend $15 million.

A portion of the proceeds were used to fund Signature Group Holdings, Inc.’s acquisition of Aleris Corp.’s global recycling and specification alloys business. Additional proceeds will be used for working capital and general corporate purposes.

GE Capital may syndicate the facility to additional lenders, the filing noted.

The revolver is divided into two sub-facilities, a U.S. sub-facility that includes an $11 million swingline sub-facility and a Canadian sub-facility.

The revolver also has a $25 million letter-of-credit sublimit, of which $5 million can be used for letters of credit for Real Alloy Canada.

Loans will bear interest at Libor, or the BA rate for Canadian loans, plus a margin based on the amount of excess availability. The applicable margin ranges from 125 basis points to 200 bps.

The facility expires on Feb. 27, 2019.

Also on Feb. 27, Aleris Recycling (German Works GmbH), a German affiliate of Real Alloy, entered into a factoring agreement with GE Capital Bank AG for an up to €50 million nonrecourse factoring facility.

Proceeds of the factory facility will also be used to fund Signature Group’s acquisition of Aleris’ recycling and alloys business, with any additional proceeds to be used for working capital and general corporate purposes.

The facility expires on Jan. 15, 2019. Interest is equal to Euribor plus 165 bps.

Signature is a Sherman Oaks, Calif.-based holding company that invests primarily in the U.S. industrial and commercial marketplace. Aleris’ global recycling and specification alloys business is based in Cleveland.

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