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Universal Stainless & Alloy Products Closes $95MM ABL Facility

January 22, 2016, 07:40 AM
Filed Under: Metals and Mining

Universal Stainless & Alloy Products, Inc. has entered into a new five-year $95 million credit agreement. As with the Company’s previous credit agreement, the Company’s obligations under the new asset-based lending (ABL) credit agreement are collateralized by substantially all of the Company's accounts receivables, inventory, and fixed assets. It also has a $25 million increase option.  The new credit agreement replaces the Company's previous credit agreement, which was scheduled to expire in March 2017.

In a separate but related action, Universal Stainless has amended the terms of the convertible notes that it issued to the sellers of its North Jackson facility in connection with its acquisition by the Company in 2011. The notes, with initial aggregate principal amount of $20 million, were scheduled to mature in August 2017.  The amendment allows for the extension of the final maturity date of the notes until as late as March 2021, at the Company’s discretion. The conversion rights remain unchanged until August 2017.  Subsequent to August 2017 the conversion rights will terminate. The Company’s obligations under the amended notes are collateralized by a second lien on the same assets of the Company that secure the Company’s obligations under the new credit agreement.

Dennis Oates, Chairman, President and Chief Executive Officer, commented: “We are pleased to have met our objective to put in place a new bank facility in the first quarter. The new ABL facility, combined with our recent reduction in outstanding debt, has significantly improved our flexibility going forward.”

Universal Stainless & Alloy Products, Inc., headquartered in Bridgeville, PA, manufactures and markets semi-finished and finished specialty steels, including stainless steel, nickel alloys, tool steel and certain other alloyed steels. The Company's products are used in a variety of industries, including aerospace, power generation, oil and gas, and heavy equipment manufacturing. Established in 1994, the Company, with its experience, technical expertise, and dedicated workforce, stands committed to providing the best quality, delivery, and service possible.

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