Sterling gets $75 million revolver

By Sara Rosenberg

New York, Nov. 1 - Sterling Construction Co. Inc. closed on a $75 million five-year revolving credit facility, according to an 8-K filed with the Securities and Exchange Commission Thursday.

Comerica Bank acted as the lead bank on the deal that was completed on Oct. 31.

Pricing can range from Libor plus 125 basis points to 225 bps depending on leverage. Initial pricing is Libor plus 175 bps.

Comerica intends to syndicate the revolver and is entitled, after consultation with the company, to change the terms, structure and pricing of the deal if the changes are necessary to insure that Comerica's lending commitment is reduced to $35 million, the filing said.

Borrowings are available for working capital, to refinance existing debt and, at close, $22.37 million was drawn to help fund the acquisition of a 91.67% interest in Road and Highway Builders, LLC.

Covenants include, beginning with the quarter ended Dec. 31, a fixed-charge coverage ratio of not less than 1.25 to 1.00.

There is also a leverage ratio of not less than 1.25 to 1.00 for the quarters ending Dec. 31 and March 31 and 2.00 to 1.00 for each quarter thereafter.

In addition, the company must maintain an asset coverage ratio of at least 1.25 to 1.00, and consolidated net losses, in the aggregate, for any two consecutive quarters of no more than $500,000.

Sterling is a Houston-based heavy civil construction company.

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