Better Minerals enters into $30 million revolver

By Carlise Newman

Chicago, Sept. 15 - Better Minerals & Aggregates Co. completed a new $30 million asset-based revolving line of credit agreement with Wachovia Bank.

Proceeds will be used to repay all amounts due under the company's previously outstanding senior secured credit agreement with BNP Paribas, provide the company with a $10 million line for letters of credit and to fund the liquidity needs of the company, including the $9.75 million senior subordinated notes interest payment due Sept. 15.

Under the terms of the new credit agreement, which expires June 30, 2008, the company has pledged all of its personal property, inventory and accounts receivable, along with first mortgage liens on its Berkeley Springs W.Va., Montpelier, Va. and Pacific, Mo. plant operations as collateral for the loan.

The interest rate on borrowings is either Libor plus 250 basis points or prime plus 125 basis points. There is a 50 basis points unused fee.

Covenants require the company's fixed charge coverage ratio to be at least 1:1 at the end of each quarter and limit the leverage ratio to 6:1 for quarters through Sept. 30, 2004, then 5.5:1 to Sept. 30, 2005, then 5.25:1 to Sept. 30, 2006 and 5:1 after that.

Monthly borrowing availability is determined by a formula based on eligible accounts receivable and inventory, reduced by outstanding letters of credit and an amount for future interest payments due on the notes.

Based on the company's $27.1 million borrowing base, and after the $9.75 million note payment and payment of the outstanding amounts due under the previous senior secured credit agreement, the company has unused borrowing capacity of $7 million.

Berkeley Springs, W.Va.-based Better Minerals supplies minerals to the construction industry.

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