Ferroglobe announces closing of $100M asset-based revolving credit facility
Ferroglobe announced the closing of a new, five-year $100M North American asset-based revolving credit facility between Globe Specialty Metals and QSIP Canada ULC, each a subsidiary of the Company, as borrowers and PNC Bank, National Association, as lender and agent. The ABL Revolver replaces the Company's revolving credit facility. At closing, the initial drawing under the ABL Revolver together with cash from Ferroglobe's balance sheet will be used to discharge in full the Company's obligations under the RCF, repurchase certain accounts receivable from the Company's accounts receivable securitization program and pay associated fees and expenses. Going forward, drawings under the ABL Revolver will be used to fund working capital needs of Globe and its subsidiaries and for general corporate purposes. At the current drawn amount, the ABL Revolver bears interest of L+3%, versus L+3.5% in the RCF. It also has a minimum liquidity requirement of $32.5M, compared to a $150M pledged cash requirement under the RCF prior to September 30, 2019. The maximum amount available under the ABL Revolver is subject to a borrowing base comprising North American inventory and accounts receivable of Globe and certain of its subsidiaries. Finally, it contains no leverage-based or financial ratio-based covenants. The credit agreement governing the ABL Revolver contains customary covenants, representations and warranties and events of default for financings of this type. The subsidiaries of the Company other than Globe and its subsidiaries will not be restricted under the negative covenants in the Credit Agreement.