Alcoa amends $1.5 billion five-year revolver, cuts pricing

By Susanna Moon

Chicago, Nov. 26 – Alcoa Corp. said it entered into an amended $1.5 billion revolving credit agreement on Wednesday.

The maturity was extended to Nov. 21, 2023 from Nov. 14, 2022.

Borrowings under the amended credit agreement bear interest at Libor plus a margin ranging from 150 basis points to 225 bps, according to an 8-K filing with the Securities and Exchange Commission.

The interest rate is subject to a 25 bps stepdown if Alcoa has a designated rating of at least Baa3 from Moody’s Investors Service or BBB- from S&P Global Ratings.

The amendment also allows the release of collateral if the company achieves an investment-grade rating with a stable outlook or better and provides additional flexibility to make restricted payments, to make investments and to incur debt, according to a company announcement.

There continues to be a $500 million accordion feature.

The financial covenants require the maintenance of a minimum interest expense coverage ratio of 5x and a maximum leverage ratio for any four consecutive fiscal quarters of 2.5x. If the collateral is released, the maximum leverage ratio will drop to 2x but may be increased to 2.25x under certain circumstances.

JPMorgan Chase Bank is the administrative agent and is a bookrunner and lead arranger, along with Bank of America Merrill Lynch, Banco Bilbao Vizcaya Argentaria, SA, New York Branch, BNP Paribas Securities Corp., Banco Bradesco SA – New York Branch, Citibank NA, Credit Suisse AG, Cayman Islands Branch, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Morgan Stanley Senior Funding, Inc., MUFG Bank, Ltd., Sumitomo Mitsui Banking Corp., SunTrust Robinson Humphrey, Inc. and ABN Amro Capital USA LLC.

Credit Suisse and Morgan Stanley are the co-documentation agents. Citibank is the syndication agent.

“Our ability to successfully amend our revolving credit agreement reflects Alcoa’s improving financial profile,” William Oplinger, executive vice president and chief financial officer, said in the press release.

“We look forward to continuing to strengthen the company to gain even greater flexibility in the future.”

Alcoa is a Pittsburgh-based aluminum producer.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.