KMG Chemicals replaces credit facility with $150 million revolver

By Tali Rackner

Norfolk, Va., Oct. 9 – KMG Chemicals, Inc. entered into a new five-year revolving credit facility with Wells Fargo Bank, NA, Bank of America, NA, JPMorgan Chase Bank, NA and HSBC Bank USA, NA, replacing its existing credit facility, according to a notice.

The new agreement increases KMG’s borrowing capacity to $150 million from $100 million and provides for an accordion feature of up to $100 million, up from $25 million previously.

Of the $150 million of available credit, $75 million of multicurrency borrowings is permitted, including euros, pounds sterling and other currencies agreeable to the lenders.

The new facility has lower interest rates and a higher maximum leverage ratio than the prior agreement.

KMG has drawn on the new credit facility to retire its $20 million 7.43% Prudential term notes due Dec. 31, 2014. In paying off the term notes, the company said it expects to reduce annual run-rate interest expense by more than $1 million.

KMG Chemicals is a Houston company that manufactures, formulates and distributes specialty chemicals.

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