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Steel Dynamics amends loan, modifying financial covenants and pricing
By Sara Rosenberg
New York, June 16 - Steel Dynamics Inc. amended its credit facility, revising financial covenants and increasing pricing, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.
Under the amendment, the interest coverage ratio was lowered to 1.25:1.00 from 2.00:1.00 for the fiscal quarters ending June 30 through Dec. 31, 2009, and then it will increase to 2.00:1.00 for the fiscal quarters ending March 31, 2010 through June 30, 2010 and to 2.5:1.00 for the fiscal quarters ending Sept. 30, 2010 and thereafter.
The total debt to consolidated EBITDA covenant of 5.00:1.00 was suspended until the fiscal quarter ending Dec. 31, 2010.
And, a first-lien debt to consolidated EBITDA requirement was added to the agreement, set at 2.50:1.00 through the fiscal quarter ending Sept. 30, 2010 and 3.00:1.00 thereafter.
As for pricing, the spread can now range from Libor plus 100 basis points to 350 bps, as opposed to from Libor plus 0 bps to 175 bps, based on the type of advance and ratio of total debt to consolidated EBITDA.
In addition, the revolver unused fee was increased to 50 bps from a range of 20 bps to 35 bps.
Furthermore, the amendment provides that the company must repay the revolver with certain proceeds of debt if, at or about the time of the incurrence or issuance of the debt, the ratio of total debt to consolidated EBITDA exceeds 5.00:1.00.
The amendment was completed on June 12.
National City Bank and Wells Fargo Bank are the co-administrative agents on the deal.
Steel Dynamics is a Fort Wayne, Ind.-based manufacturer and seller of steel products.
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