Koppers acquires new $800 million credit facility

By William Gullotti

Buffalo, N.Y., June 21 – Koppers Holdings Inc. subsidiary Koppers Inc. entered into a new $800 million credit facility on June 17, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

The new facility is divided in two parts and matures on June 17, 2027, subject to a springing maturity that is 91 days prior to maturity of the company’s January 2017 private placement of 6% senior notes due 2025 to the extent such notes remain outstanding on such date.

Included in the new agreement is an $800 million revolver and potential for one or more incremental revolving or term loan facilities.

The potential facilities are subject to a multi-conditional limitation. They may not exceed (x) the sum of (i) $500 million, plus (ii) the greater of $230 million and 100% of the parent company’s consolidated EBITDA on a pro forma basis for the most recently ended four consecutive fiscal quarter period for which financial statements are available; plus (y) an unlimited amount so long as on the date of incurrence the parent company’s secured net leverage ratio as of the last day of the most recently ended four consecutive fiscal quarter period for which financial statements are available, on a pro forma basis, does not exceed 3.41x; plus (z) the aggregate amount of any voluntary prepayments or other retirements of indebtedness.

The $800 million revolver has a $125 million sublimit for letters of credit and a $50 million sublimit for swingline loans.

Borrowings will bear interest at SOFR, or the appropriate Eurocurrency rate, plus an applicable margin ranging from 125 basis points to 225 bps. There is also a facility commitment fee on the unused portion of the revolver ranging from 15 bps to 25 bps. Margins and fees are initially determined on the passage of time, and thereafter based upon the company’s total net leverage ratio.

After closing and in consultation with the co-sustainability agents, the company is able to amend the agreement for the purpose of incorporating either key performance indicators (KPIs) with respect to certain environmental, social and governance (ESG) targets or external ESG ratings targets. Certain pricing adjustments may be made under the agreement based on the company’s performance against the KPIs or upon achieving the external ESG targets.

PNC Bank, NA is the revolving administrative agent, collateral agent and swingline loan lender. Wells Fargo Bank, NA is the term administrative agent.

PNC Capital Markets LLC, Wells Fargo Securities, LLC, BofA Securities, Inc., Fifth Third Bank, NA, Citizens Bank, NA and Truist Securities Inc. are the lead arrangers and joint bookrunners with Northwest Bank and First National Bank of Pennsylvania as co-documentation agents.

PNC Capital Markets and BofA Securities are also serving as co-sustainability agents.

Upon closing of the new credit agreement, Koppers terminated its existing credit agreement dated Feb. 17, 2017. The prior credit facility consisted of a $600 million revolver and a $100 million secured term loan.

Koppers is a Pittsburgh-based provider of treated wood products, wood treatment chemicals and carbon compounds.

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