Global Brass and Copper Holdings, Inc. announced, that on July 18, 2016, it refinanced its debt structure by retiring its senior secured notes and entering into new asset-based revolving credit and long term debt (the “Term Loan B Credit Agreement”) agreements.

According to an 8-K report filed with the SEC, JPMorgan Chase is the administrative agent on the facilities with Bank of America, N.A. and Wells Fargo Bank, National Association, as co-syndication Agents

The ABL Facility is an asset-based revolving loan facility that provides for borrowings of up to the lesser of $200.0 million or the borrowing base both, in each case, less outstanding loans and letters of credit. 

Global Brass also entered into a $320 million Term Loan B Credit Agreement expiring July 18, 2023. While subject to a net leverage pricing grid, the initial interest rate in this facility is 5.25% as it is based on 425 basis points over LIBOR, which is subject to a 1% floor. This facility is prepayable and is subject to a total net debt leverage ratio test of less than 4.0 (tested quarterly), an excess cash flow sweep which steps down based on the total net debt leverage ratio, and a 1% annual principal amortization.

The company used the proceeds from the Term Loan B Credit facility, along with approximately $11.8 million of our own cash, to retire our $305.3 million senior secured notes facility, which bore interest at a rate of 9.5%, and for ongoing working capital and other general corporate needs. Based on current market conditions and interest rate environment, this refinancing represents a 425 basis point reduction in our borrowing rate, which equates to an approximate $12 million reduction in interest annually.

In a related transaction, the company also replaced its existing asset-based revolving credit facility by entering into a new ABL Facility that matures on July 19, 2021. This facility allows for borrowings up to the lesser of $200 million or the borrowing base. Along with a $200 million accordion feature, this facility bears interest at LIBOR plus 1.25% to 1.75%, depending on availability. At closing, no borrowings under the ABL Facility were outstanding.

Global Brass and Copper Holdings, Inc., through its wholly-owned principal operating subsidiary, Global Brass and Copper, Inc., is a leading, value-added converter, fabricator, processor and distributor of specialized non-ferrous products in North America.