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Goldman Sachs, Others Complete Harsco Refi of Term Loans and Extension of Revolving Credit Facility

March 11, 2021, 07:10 AM
Filed Under: Environmental Services

Harsco Corporation amended its existing senior secured credit agreement by completing a new term loan B facility (the “New Term Loan”) of $500.0 million and extending the maturity of the existing $700.0 million revolving credit facility thereunder (the “Revolving Credit Facility”).

For the Amendment in connection with the New Term Loan, Goldman Sachs Bank USA, Citigroup Global Markets Inc., BMO Capital Markets Corp., BOFA Securities, Inc., HSBC Securities (USA) Inc., RBC Capital Markets/Royal Bank of Canada, PNC Capital Markets LLC, and Fifth Third Bank, have acted as joint bookrunners and joint lead arrangers.

The New Term Loan, which was over-subscribed, bears interest at a rate per annum of 2.25% over LIBOR, subject to a 0.50% floor. The New Term Loan has quarterly principal amortizations of .25% beginning in September 2021 and matures on March 10, 2028. The proceeds of the New Term Loan were applied to (a) repay in full the outstanding term loan A and term loan B under the Credit Facility, and (b) pay related transaction fees and expenses.

At the same time, the Company’s Revolving Credit Facility was extended from June 28, 2024 to March 10, 2026 with favorable covenant modifications. Specifically, the total net leverage ratio covenant under the facility, currently capped at 5.75x of consolidated adjusted EBITDA, will remain so through the end of 2021. The Revolving Credit Facility bears interest at a rate, depending on total net leverage, ranging from 150 to 250 basis points over LIBOR.

“We are extremely pleased to complete the New Term Loan and amendment, which further improves our financial flexibility,” said Pete Minan, Senior Vice President and Chief Financial Officer. “This transaction strengthens Harsco’s financial position by extending the maturity profile of our debt while lowering our cash interest costs. Investor support for this amendment was very positive and reflects the positive trends within our business and our initiatives to strengthen cash flow and reduce leverage over the next year. I am also very grateful for the overwhelming support of our bank group.”

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