Schweitzer-Mauduit increases credit agreement capacity to $1 billion

By Wendy Van Sickle

Columbus, Ohio, Oct. 28 – Schweitzer-Mauduit International, Inc. entered into a $1 billion five-year second amended and restated credit agreement on Wednesday with JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The agreement provides for a $650 million revolving credit facility available to Schweitzer-Mauduit, SWM Luxembourg and SWM Holdco 1; a $100 million term loan A-1; and a $250 million term loan A-2.

The revolver matures on Oct. 28, 2020.

The term loan A-1 amortizes at 5% for the first two years, 10% for the final three years and matures on Oct. 28, 2020. The term loan A-2 amortizes at 1% per year and matures on Oct. 28, 2022.

Prior to the amendment and restatement, the agreement provided for a $500 million revolver and was set to mature Dec. 11, 2018.

Revolver and term loan A-1 borrowings bear interest at Libor plus a margin of 125 basis points to 225 bps. The term loan A-2 bears interest at Libor plus 150 bps to 250 bps. The spread is based on the company’s ratio of net debt to EBITDA.

J.P. Morgan Securities LLC, Fifth Third Bank, BofA Merrill Lynch, SunTrust Robinson Humphrey, Inc. and Agfirst Farm Credit Bank are joint lead arrangers and bookrunners; Fifth Third Bank, BofA Merrill Lynch, SunTrust Bank and Agfirst are co-syndication agents.

The company borrowed the $350 million in term loans Wednesday in part to finance its $280 million acquisition of Argotec, a Greenfield, Mass.-based manufacturer urethane films for specialty applications, and in part to pay down the revolver.

The credit facilities are secured by substantially all of the personal property of the company and its domestic subsidiaries. The obligations of SWM Holdco 1 are also secured by a pledge of the equity interests held by SWM Luxembourg and SWM Holdco 1 in subsidiaries of the company.

The agreement requires the company to maintain a maximum net debt to EBITDA ratio of 3.5 times, reducing to 3 times after Sept. 30, 2016, and minimum interest coverage of 3 times.

Alpharetta, Ga.-based Schweitzer-Mauduit provides engineered solutions to the tobacco industry.

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