Aperam Agrees to Extend $600 Million of Borrowing-Base Facility
Aperam, the stainless-steel producer spun off from ArcelorMittal (MT), agreed to extend the maturity on $600 million of a borrowing-base facility by one year, according to a statement yesterday on its website.
The credit line will now be due in March 2015 after the so- called forward-start deal was approved by the nine banks providing the facility, Julien Onillon, chief financial officer of the Luxembourg-based company, said yesterday on a conference call. Forward-starts lock-in financing terms early before the existing borrowings mature.
Debt-market conditions are “extremely difficult and I’m not sure any corporate will extend debt facilities by three years,” Onillon said. The company now has a “stable maturity profile” for 2015 and 2016, when two bonds totaling $500 million are also due, he said.
Aperam (APAM) will stop paying dividends to accelerate net debt reduction, targeting a level of $650 million by the end of 2014, according to the statement. The company opted not to extend the full $800 million of the credit line for that reason, Onillon said on the call.
The original facility was signed in 2011 and paid an interest margin of 210 basis points more than the euro interbank offered rate, according to data compiled by Bloomberg. Societe Generale was agent on the deal, the data show. A basis point is 0.01 percentage point.
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