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WCCF Canada Upsizes Tree Island Steel Credit Facility

July 06, 2018, 07:00 AM
Filed Under: Metals and Mining

Tree Island Steel Ltd. announced that it has successfully renewed its senior banking facility on more favorable terms with Wells Fargo Capital Finance Corporation Canada.  The five year Senior Secured Revolving Facility has been increased to $80 million, comprised of a $60 million revolver and a $20 million term loan for financing existing machinery and equipment and future capital expenditures.

Under the terms of the Facility, interest is charged at variable rates based on the Canadian and/or US Prime rate and the applicable benchmark interbank rate.  For the revolving facility, up to $60 million may be borrowed in Canadian and/or US dollars, with the amount advanced under the revolving facility limited to a defined percentage of inventories, accounts receivable and real estate, less certain reserves.  In addition, up to $20 million may be borrowed as term debt in Canadian and/or US dollars.  The existing term debt will be rolled into a new term loan, with up to $10 million available to finance future capital expenditures.

The Facility is secured by a first charge over Tree Island’s assets, supported by guarantees and pledges, and requires that certain covenants be met by Tree Island.

Dale R. MacLean, President and CEO of Tree Island, commented, “We are pleased to be continuing our long relationship with Wells Fargo, who have been instrumental in supporting our Company since 2010.”

“This renewed five year $80 million credit facility provides Tree Island with prudent and effective use of funds for the working capital and expansion capital needs of Tree Island,” commented Amar Doman, Chairman of the Board of Directors of Tree Island.

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