TPI Composites cuts margin 225 bps via restated $100 million agreement

By Wendy Van Sickle

Columbus, Ohio, Jan. 6 – TPI Composites, Inc. entered a credit agreement for a $75 million term loan facility and a $25 million revolving credit facility, each with a four-year term, on Dec. 30, according to an 8-K filing with the Securities and Exchange Commission.

HPS Investment Partners, LLC is the administrative agent and Capital One, NA is the revolving loan representative.

The agreement amends the company’s existing $100 million term loan credit facility that was scheduled to mature on Aug. 19, 2018, with Highbridge Principal Strategies, LLC as administrative agent. The new credit agreement reduces the interest rate by 225 basis points from the previous term loan.

Borrowings under the new credit agreement bear interest at Libor plus 575 bps, with a 1% Libor floor.

Principal payments on the term loan are payable in equal quarterly installments of $937,500 beginning on March 31, with the balance due at maturity on Dec. 30, 2020.

The term loan was made with a 2% original issue discount.

The revolver has a $15 million sublimit for letters of credit.

TPI Composites drew the full term loan amount and $2.8 million on the revolver at closing.

Bill Siwek, TPI’s chief financial officer, said in a press release that the refinancing provides the company with “a more flexible and cost effective capital structure entering 2017.”

“The new loan facility features a reduced borrowing rate, the flexibility of a revolver component with letter of credit capacity to free up approximately $10 million of currently restricted cash as well as a reduced number of covenants and a more favorable covenant structure,” he said.

“This increased flexibility and improvement in our capital structure positions us well to continue to capitalize on the strong wind industry growth and ongoing outsourcing trends,” he said.

The manufacturer of composite wind blades is based in Scottsdale, Ariz.

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