Olympic Steel gives details on $400 million five-year restated revolver

By Marisa Wong

Morgantown, W.Va., Dec. 14 – Olympic Steel, Inc. disclosed details of its $400 million third amended and restated credit agreement in an 8-K filed Thursday with the Securities and Exchange Commission.

Olympic Steel entered into the loan agreement on Dec. 8 with Bank of America, NA and JPMorgan Chase Bank, NA as joint lead arrangers; Merrill Lynch, Pierce, Fenner & Smith Inc. and JPMorgan as joint bookrunners; Bank of America as agent; JPMorgan as syndication agent; and KeyBank NA and Wells Fargo Bank, NA as co-documentation agents.

The revolving credit facility consists of an up to $370 million tranche A revolver with a $20 million sub-limit for letters of credit and an up to $30 million first in, last out tranche B revolver. The facility matures on Dec. 8, 2022

The company may request additional commitments of up to $200 million.

Interest is equal to Libor plus an applicable margin based on excess availability. The applicable margin ranges from 125 basis points to 175 for the tranche A loans and 225 bps to 275 bps for the tranche B loans. The applicable margin is initially 150 bps and 250 bps, respectively.

Loans are secured by a first priority security interest in substantially all of the company’s existing and future personal property, including 65% of the voting capital stock of some direct foreign subsidiaries.

The loan agreement contains a financial covenant requiring the company to maintain a fixed-charge coverage ratio of at least 1.00 to 1.00.

At closing, the company had about $199 million of outstanding borrowings and $137 million of availability under the new credit agreement, according to a Wednesday press release.

Olympic Steel is a Cleveland-based metals service center focused on the direct sale and distribution of large volumes of processed carbon, coated and stainless flat-rolled sheet, coil and plate steel and aluminum products.

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