Commercial Metals extends credit agreement, adds $150 million loan

By Tali Rackner

Minneapolis, June 26 – Commercial Metals Co. and wholly owned subsidiary CMC International Finance Sarl entered into a second amendment to their credit agreement on Friday with Bank of America, NA as administrative agent, swingline lender and letter-of-credit issuer, according to an 8-K filing with the Securities and Exchange Commission.

The second amendment extends the maturity date of the credit agreement to June 23, 2022 and provides for an up to $150 million five-year coterminous delayed-draw term loan.

The amendment also provides that, with bank approval and subject to the satisfaction of certain conditions, the company may increase the revolving credit facility and/or establish a new term loan in a total amount of up to $250 million.

The term loan will generally will bear interest on the same terms and conditions as the revolver.

Term loan proceeds will be used for general corporate purposes, including funding the partial repayment of Commercial Metals’ outstanding 6˝% senior notes due 2017 and 7.35% senior notes due 2018. The company currently anticipates drawing on the term loan to, in part, partially repay the 2017 notes, of which there are $300 million aggregate principal amount outstanding.

Wells Fargo Bank, NA, Citibank, NA and PNC Bank, NA acted as co-syndication agents on the deal with and were also joint lead arrangers and book managers with Merrill Lynch, Pierce, Fenner & Smith Inc.

Also on Friday, Commercial Metals entered into a third amendment to the credit agreement to, among other things, allow the company’s previously announced plan to exit its International Marketing and Distribution Segment and its disposition of its raw materials trading division pursuant to an Interest Purchase Agreement with Traxys North America LLC and Traxys Europe SA, which are affiliates of Carlyle Group, as well as the company’s plan to pursue a sale of its CMC Cometals Steel division and a restructuring and sale of its remaining trading operations located in Asia and Australia.

Commercial Metals manufactures, recycles and markets steel and metal products as well as related materials and services and is based in Irving, Texas.

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