KMG Chemicals reduces pricing on term loan, revolving credit facility

By Wendy Van Sickle

Columbus, Ohio, Dec. 19 – KMG Chemicals, Inc. amended its credit agreement with KeyBank NA as administrative agent on Tuesday to reduce the interest margin on both the revolving and the term loan tranches, according to an 8-K filing with the Securities and Exchange Commission.

The current margin above Libor for the $356 million outstanding under the term loan was reduced to 275 basis points from 400 bps. There is a stepdown to 250 bps if the ratio of net funded debt to adjusted EBITDA falls below 2.5 to 1.0.

The current margin above Libor for the revolver was reduced to 225 bps from 300 bps. The margin steps up to 250 bps if the ratio of net funded debt to adjusted EBITDA rises above 3.75 to 1.0 and to 275 bps if the ratio exceeds 4.25 to 1.0.

The revolver is currently undrawn. The amendment also reduced the revolving commitment fee to 37.5 bps from 50 bps.

KeyBanc Capital Markets Inc., HSBC Securities (USA) Inc. and JPMorgan Chase Bank, NA are the joint lead arrangers and joint bookrunners.

KMG is a Fort Worth-based producer and distributor of specialty chemicals.

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