Kaiser Aluminum boosts loan commitments to $300 million via JPMorgan

By Susanna Moon

Chicago, Oct. 3 - Kaiser Aluminum Corp. amended its credit agreement last Friday with JPMorgan Chase Bank, NA as administrative agent, boosting the commitments to $300 million, according to an 8-K filing with the Securities and Exchange Commission.

The term was extended to September 2016 from March 2014, and the commitments were increased from $200 million. Kaiser may use up to $60 million for letters of credit.

Interest on the loans is initially Libor plus 175 basis points.

The company will also pay a monthly commitment fee of 50 bps of the average daily unused portion of the total revolving commitment, which will accrue at a rate equal to 37.5 bps per year if the average daily unused portion of the total revolving commitment is less than 33.3% of the total revolving commitment.

Under the new terms, the company may borrow a total amount equal to the lesser of $300 million and a borrowing base comprising (a) 85% of eligible accounts receivable, (b) the lesser of (i) 65% of eligible inventory, valued at the lower of cost or market value, and (ii) the product of 85% multiplied by the net orderly liquidation value percentage identified in the most recent inventory appraisal ordered by the administrative agent, multiplied by eligible inventory, valued at the lower of cost or market value, and (c) certain eligible machinery and equipment (d) less certain reserves.

The revolving credit facility may be increased to up to $350 million, subject to conditions and the agreement of lenders.

The revolver is secured by a first-priority lien on substantially all of the accounts receivable and inventory, specified equipment and other assets and proceeds.

Kaiser Aluminum, based in Foothill Ranch, Calif., is a producer of semi-fabricated specialty aluminum products.

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