Schnitzer Steel lifts U.S. revolver to $670 million, extends facility

By Susanna Moon

Chicago, April 16 - Schnitzer Steel Industries, Inc. extended its credit facility to April 2017, lowered pricing on the loans and increased the size of its U.S. revolving loans by $50 million to $670 million. The size of the Canadian revolver remains unchanged at C$30 million.

The company amended its credit agreement last Wednesday with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

Pricing on the loans will now be Libor or Cdor plus 125 basis points to 225 bps, based on leverage. The commitment fees are 15 bps to 35 bps.

The company's subsidiaries, Schnitzer Steel BC, Inc. and Schnitzer Steel Pacific, Inc., are the Canadian borrowers.

Schnitzer Steel closed the five-year unsecured credit facility, consisting of a $620 million revolver and a C$30 million revolver, on Feb. 9 with Bank of America Merrill Lynch as lead arranger and bookrunner.

Initial pricing was Libor or Cdor plus 200 bps with a 30 bps commitment fee. The spread was Libor or Cdor plus 175 bps to 275 bps, based on leverage, and the commitment fee was 25 bps to 45 bps.

Covenants included a minimum fixed-charge coverage ratio and a maximum leverage ratio.

Proceeds were used to replace a $450 million revolver that was set to mature in July 2012.

Schnitzer Steel is a Portland, Ore.-based recycler of scrap metal, provider of used and recycled auto parts and a manufacturer of finished steel products.

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