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Northwest Pipe gets $74 million revolver, $16 million delayed-draw
By Sarah Lizee
Olympia, Wash., Feb. 6 – Northwest Pipe Co. and wholly owned subsidiary NWPC, LLC amended their credit agreement with Wells Fargo Bank, NA on Jan. 31, lifting availability for revolving and letter-of-credit loans up to $74 million from $60 million, according to an 8-K filing with the Securities and Exchange Commission.
The amendment follows Northwest Pipe’s acquisition of Geneva Pipe Co., Inc., which closed on Jan. 31 and was funded with cash on hand and debt.
Geneva was added as a borrower under the credit agreement.
The revolver’s availability is subject to a borrowing base and may be increased by up to $100 million.
The maturity date of the agreement was extended to Oct. 25, 2024 from Oct. 25, 2023.
The revolver bears interest at Libor plus 150 basis points to 200 bps, depending on average availability.
There is a $16 million delayed-draw term loan under the credit agreement as well, which the borrowers may request at any time prior to March 30. It bears interest at Libor plus 200 bps to 250 bps and, if drawn, would be subject to monthly principal payments.
The borrowers will be obligated to prepay the term loan to the extent that the outstanding principal balance at any time exceeds 60% of the fair market value of specified real property securing the loan.
There is also a provision that would require prepayment of the obligations in an amount equal to 20% of excess cash flow.
Subject to some limitations, the borrowers may also voluntarily prepay the balance upon 10 business days’ written notice.
There is a new financial covenant requiring Northwest Pipe to maintain a senior leverage ratio not greater than 3x.
Additionally, the amendment modifies an existing financial covenant, requiring Northwest Pipe to maintain a fixed charge coverage ratio of at least 1.1x.
Northwest Pipe is a Vancouver, Wash.-based manufacturer of welded steel pipe.
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