Olympic Steel gets restated five-year revolvers totaling $365 million

By Angela McDaniels

Tacoma, Wash., July 3 – Olympic Steel, Inc. entered into a second amended and restated loan and security agreement on Monday that provides for a $340 million tranche A revolving credit facility and a $25 million first-in, last-out tranche B revolver, according to an 8-K filing with the Securities and Exchange Commission.

The tranche A revolver has a $60 million sublimit for letters of credit.

Both revolvers mature June 30, 2019.

The initial interest rate is Libor plus 150 basis points for the tranche A revolver and Libor plus 275 bps for the tranche B revolver. The applicable margin over Libor ranges from 125 bps to 175 bps for the tranche A revolver and from 250 bps to 300 bps for the tranche B revolver based on excess availability.

The initial unused line fee is 25 bps. It is either 25 bps or 37.5 bps depending on excess availability.

The loan agreement has a $160 million accordion feature.

Bank of America, NA and J.P. Morgan Securities LLC are the joint lead arrangers. Bank of America Merrill Lynch and J.P. Morgan Securities are the joint bookrunners. JPMorgan Chase Bank, NA is the syndication agent. Keybank NA, U.S. Bank NA and Wells Fargo Bank, NA are the co-documentation agents.

Some of the company’s wholly owned domestic direct and indirect subsidiaries are also borrowers under the loan agreement.

The revolvers are secured by a first-priority security interest in substantially all of the existing and future personal property of the company and the other borrowers, including 65% of the voting capital stock of some of the borrowers’ direct foreign subsidiaries, subject to certain exceptions.

The loan agreement contains a financial covenant that measures the ratio of the amount of the borrowers’ consolidated EBITDA to the borrowers’ cash interest expense.

Olympic Steel is a Bedford Heights, Ohio-based processor and distributor of flat-rolled carbon, stainless and tubular steel products.

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