Glatfelter closed on a new 5-year, $400 million revolving credit facility and a Euro 220 million term loan facility on February 8, 2019, as the company said in the press release received by Lesprom Network.
The revolving credit facility will be used to refinance outstanding indebtedness under Glatfelter’s existing senior credit facility, for general corporate purposes including working capital needs and to finance future organic and acquisition growth. The proceeds of borrowings under the term loan facility will be used to redeem, at par, its outstanding $250 million, 5.375% senior notes on February 28, 2019. The credit facility is unsecured and contains customary representations and affirmative and negative covenants.
“The retirement of our $250 million Notes using the term loan proceeds allows us to effectively manage our leverage going forward as this replacement debt is fully pre-payable without penalties,” said John P. Jacunski, Executive Vice President and CFO. “This added flexibility, in conjunction with a new 5-year revolver, provides the liquidity we need for future organic and acquisition growth. Furthermore, moving to an all-bank debt financing structure meaningfully reduces interest expense through lower borrowing rates. As a result, we expect interest expense to be reduced by $6 million in 2019 compared with 2018 and $8 million on an annualized basis, thereafter. This underscores our commitment to right-size our cost structure in line with the new scale of the business.”
The Euro term loan provides the Company with the ability to manage its foreign currency exposure to better align its Euro-denominated earnings and cash flows with debt obligations. The new credit agreement has a maturity date of February 8, 2024.
Glatfelter is a leading global supplier of engineered materials.