AdvanSix restates facility to terminate term loan, upsize revolver

By Tali Rackner

Minneapolis, Feb. 23 – AdvanSix, Inc. entered into an amendment to its $270 million senior secured term loan and $155 million senior secured revolving credit facility on Wednesday, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA is the administrative agent.

Under the amendment, the term loan facility was terminated and all outstanding term loans thereunder were paid in full, and the maximum principal amount of the revolver was increased to $425 million.

The revolver now matures on Feb. 21, 2023.

The amended and restated facility includes a $40 million sublimit for letters of credit and a $40 million sublimit for swingline loans.

The company may increase the facility up to the sum of $175 million plus an amount so that the company’s consolidated senior secured leverage ratio would not be greater than 1.75 times, the filing said. The accordion feature is available in the form of incremental term loans and/or an increase to the revolver.

Borrowings bear interest at Libor plus 175 basis points. The spread ranges from Libor plus 150 bps to 250 bps, depending on AdvanSix’s consolidated leverage ratio.

The initial commitment fee is 25 bps, and ranges from 20 bps to 40 bps, also based on leverage.

The restated credit agreement also contains financial covenants that require the company to maintain a minimum consolidated interest coverage ratio of 3 times, according to the 8-K. It must also keep a maximum consolidated leverage ratio of (a) 3.5 times for the fiscal quarters from closing through Dec. 31, 2019; (b) 3.25 times through Dec. 31, 2020; (c) 3 times through Dec. 31, 2021; and (4) 2.75 times after that.

At closing, AdvanSix borrowed $242 million under the revolver to repay the term loan facility.

Merrill Lynch, Pierce, Fenner & Smith Inc., JPMorgan Chase Bank, NA, Fifth Third Bank, SunTrust Robinson Humprey, Inc. and PNC Bank, NA acted as joint lead arrangers and bookrunners on the facility. JPMorgan, Fifth Third Bank, SunTrust Bank and PNC acted as co-syndication agents, and Citizens Bank of Pennsylvania acted as documentation agent.

AdvanSix manufactures a polymer resin, Nylon 6. The company is based in Morris Plains, N.J.

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