Algoma Steel upsizes ABL revolver to $300 million, extends to 2028

By Wendy Van Sickle

Columbus, Ohio, May 25 – Algoma Steel Group Inc. upsized its senior secured asset-based revolving credit facility to $300 million from $250 million and extended the term to May 2028, according to a news release.

The interest rate on the ABL credit facility will be based on SOFR plus a credit spread adjustment of 10 basis points plus an applicable margin, which will vary depending on usage.

“With this new ABL credit facility, we have strengthened our liquidity, extended the maturity out five years and increased our financial flexibility,” Rajat Marwah, Algoma’s chief financial officer, said in the release. “The financial terms reflect Algoma’s prudent financing strategy and strength of our business and cash flow profile through market cycles.

“We remain laser-focused on creating and delivering long-term shareholder value as we execute our transition to electric arc steelmaking to become one of North America’s leading providers of green steel.”

With the closing of this transaction, Algoma has approximately $260 million of unused availability on the ABL facility with existing usage primarily related to letters of credit. The facility can be used to fund working capital needs, general corporate purposes and strategic growth initiatives.

Wells Fargo Capital Finance Corp. Canada is acting as the administrative agent and as a joint lead arranger and bookrunner along with Bank of Montreal.

The borrower is a Sault Ste. Marie, Ont.-based steel producer.

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