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JPMorgan Chase Agents $1.25B Revolving Credit Facility for Alcoa

June 30, 2022, 07:39 AM

Alcoa Corporation has amended and restated its existing revolving credit facility into a $1.25 billion revolving credit facility with improved terms, including the addition of sustainability-linked metrics. JPMorgan Chase acted as the administrative agent, Citibank as the syndication agent, and ING Capital as the sustainability structuring agent.

The agreement for the Facility continues to be between Alcoa Nederland Holding B.V., a wholly owned subsidiary of Alcoa Corporation, and a syndicate of banks. Alcoa has not drawn on the Facility, which has been in place since November 2016.

Some of the key benefits of the amended and restated revolving credit agreement include:

  • Greater flexibility for Alcoa to execute on its long-term strategies.
  • An extended maturity date from November 2023 to June 2027.
  • Release by the lenders of the collateral package that had previously secured the Facility, which will continue so long as certain credit ratings are maintained.
  • Additional flexibility for dividends and other restricted payments, to make investments, and to incur indebtedness.
  • A sustainability adjustment to the applicable margin and commitment fee that may result in a positive or negative adjustment based on two of the Company’s existing sustainability metrics.

“The improved terms of the amended Facility reinforce the important work that we’ve completed over these past several years to strengthen Alcoa’s balance sheet,” said Executive Vice President and Chief Financial Officer William Oplinger. “Alcoa is well positioned for the future, and this Facility is another proof point of the strength of the Company and its commitment to our strategy to advance sustainably.”

The Facility includes two of the Company’s existing sustainability-backed metrics: First, reducing carbon dioxide equivalent intensity in the Company’s smelting and refining segments for direct (Scope 1) and indirect (Scope 2) emissions and, second, increasing the percentage of renewable sources that power the Company’s global aluminum smelters, including hydro, geothermal, solar, wind and biomass.

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