Forterra anticipates new five-year $300 million asset based revolver

By Wendy Van Sickle

Columbus, Ohio, Oct. 21 – Forterra, Inc. expects to enter into a new up to $300 million five-year asset based revolving credit facility, according to a 424B4 prospectus filed with the Securities and Exchange Commission.

The new revolver is expected to have a $280 million sublimit for use in the United States and a $20 million sublimit for use in Forterra’s Canadian operations.

Additionally, there would be a sublimit for letters of credit to be agreed upon between the company and its lenders.

Interest is expected to range from Libor, or CDOR, plus a margin ranging from 125 basis points to 175 bps.

Forterra also expects that the facility would be able to be expanded by the greater of $100 million and such amount as would not cause the borrowing base to be exceeded by more than $50 million.

Borrowings would be subject to a borrowing base equal to the sum of the company’s eligible cash, 85% of eligible accounts receivable and the lesser of 75% of eligible its inventory and 85% of the orderly liquidation value of its eligible inventory.

The company said it expects to enter into the new asset-based revolver as well as a previously announced new $1.05 billion term loan facility upon its completion of an offering of 18.24 million of its common shares.

Proceeds of the new facilities will be used to repay and terminate Forterra’s existing revolver, senior term loan facility and junior term loan facility.

The company said it expects to launch the syndication of the new facilities contemporaneously with the launch of stock offering.

Forterra said the stock offering cannot be consummated without completion of the financing under the new facilities or the receipt of consents from its current lenders, as the offering would result in events of default under the terms of the existing revolver, senior term loan and junior term loan.

Forterra is an Irving, Texas-based manufacturer of drainage and water transmission pipe and products.

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