Kronos Worldwide gets $225 million global asset-based revolver

By Marisa Wong

Los Angeles, April 23 – Kronos Worldwide, Inc. and subsidiaries Kronos Louisiana, Inc., Kronos (US), Inc., Kronos Canada, Inc., Kronos Europe NV and Kronos Titan GmbH entered into a credit agreement on April 20 with Wells Fargo Bank, NA as administrative agent and lender, providing for a new global $225 million asset-based revolving credit facility, according to an 8-K filed Friday with the Securities and Exchange Commission.

The revolver may be used for general corporate purposes, concurrently refinances and replaces the company’s $125 million North American revolver with Wells Fargo Capital Finance, LLC as agent and the €120 million European revolver in favor of some of the company’s subsidiaries with Deutsche Bank Luxembourg SA as agent.

The new revolver provides for borrowings in amounts up to $225 million through April 2026 – with revolving borrowings by Kronos Canada, Kronos Europe and Kronos Titan limited to C$25 million, €30 million and €60 million, respectively – with available borrowings based on formula-determined amounts of eligible trade receivables and inventories of the borrowers, less any outstanding letters of credit issued under the revolver.

Borrowings bear interest at Libor, CDOR or Euribor, as applicable, plus a margin ranging from 150 basis points to 200 bps. Euro-denominated borrowings are subject to a 0.25% Euribor floor. The applicable margin is based upon initially the passage of time and thereafter upon average availability under the facility.

The company is also required to pay an unused fee to the lender of either 25 bps or 37.5 bps, determined initially by the passage of time and thereafter upon average facility usage.

The revolver is collateralized by, among other things, a first priority lien on the trade receivables and inventories of the company and the subsidiaries.

In addition, the facility requires maintenance of a fixed-charge coverage ratio of at least 1.0 to 1.0.

Kronos is a Dallas-based producer and marketer of titanium dioxide pigments.

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