Universal Stainless secures restated $120 million credit agreement

By Sarah Lizee

Olympia, Wash., Aug. 6 – Universal Stainless & Alloy Products, Inc entered into a first amended and restated revolving credit, term loan and security agreement on Friday with PNC Bank, NA as administrative agent providing for an up to $110 million senior secured revolving credit facility and a $10 million senior secured term loan facility, according to an 8-K filing with the Securities and Exchange Commission.

The asset-based lending credit agreement provides for an up to $10 million letter-of-credit subfacility and an up to $11 million swing loan subfacility.

The facilities mature on Aug. 3, 2023.

Revolver borrowings bear interest at Libor plus a margin ranging from 125 basis points to 200 bps, and term loan borrowings bear interest at Libor plus 175 bps to 250 bps, in each case depending on the leverage ratio. Initially, interest on the revolver is Libor plus 175 bps, and interest on the term loan is Libor plus 225 bps.

Universal Stainless and subsidiaries Dunkirk Specialty Steel, LLC and North Jackson Specialty Steel, LLC are coborrowers under the facilities.

The coborrowers will pay quarterly installments for the term loan of about $357,142.86, plus accrued interest, on the first day of each fiscal quarter beginning on Oct. 1.

The new credit agreement amends and restates the company’s prior revolving credit, term loan and security agreement dated as of Jan. 21, 2016 with Bank of America and PNC Capital Markets.

The prior credit agreement provided for a $73 million senior secured revolving credit facility and a $30 million senior secured term loan facility, each of which was scheduled to expire upon the earlier of Jan. 21, 2021 or the date that is 90 days prior to the scheduled maturity date of the Gorbert notes, the convertible notes issued in connection with Universal Stainless’ acquisition of a facility in North Jackson, Ohio.

PNC Capital Markets LLC is the lead arranger and bookrunner. PNC Bank and Bank of America, NA are co-collateral agents.

Universal Stainless is a Bridgeville, Pa.-based manufacturer and marketer of semi-finished and finished specialty steels, including stainless steel, tool steel and other alloyed steels.

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