MRC Global postpones term loan B refinancing due to lawsuit

By Sara Rosenberg

New York, April 28 – MRC Global Inc. postponed the proposed refinancing of its $295 million term loan B due September 2024 due to a lawsuit by Cornell Capital LLC, according to an 8-K filed with the Securities and Exchange Commission on Friday.

For the refinancing, the company was in market with a $300 million five-year first-lien term loan B (B3/B) talked at SOFR+10 basis points CSA plus 400 bps with a 0.5% floor, an original issue discount of 98.5 to 99 and 101 soft call protection for six months.

JPMorgan Chase Bank was the lead on the deal.

“MRC Global sought to refinance its term loan B long before its maturity to take advantage of relatively favorable market conditions. Cornell Capital’s lawsuit seeks to prevent this refinancing by claiming that Cornell Capital has a right to consent to the terms of the refinancing transaction. Although we do not believe this is the case, the lawsuit has complicated the execution of the refinancing on favorable terms. Therefore, we have determined to postpone the present refinancing efforts before their conclusion,” the company said in a statement filed in the 8-K.

As previously reported, Cornell, the sole holder of MRC’s 6.5% series A convertible perpetual preferred stock, filed a lawsuit seeking an injunction to prevent MRC from signing or executing any definitive documentation with respect to, or otherwise consummating the new term loan B.

The lawsuit claims that MRC violated Cornell’s bargained-for rights under the certificate of designations, as the refinancing would, among other things, restrict MRC’s ability to pay dividends on the series A preferred stock, MRC disclosed in a SC 13D/A filed with the SEC.

MRC said in the filing that, if need be, it is confident that it could repay the existing term loan debt utilizing its asset-based lending facility due September 2026 and cash generated from operations.

As of Dec. 31, the company had availability under the asset-based facility of $606 million, yielding total liquidity, including cash on hand, of $638 million. In addition, the company expects to generate $120 million in cash from operations during 2023.

MRC is a Houston-based distributor of pipe, valves and fittings and other infrastructure products and services to diversified energy and industrial end markets.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.