MRC Global Announces Closing of $750 Million Asset-Based Loan Facility

Rhea-AI Summary

MRC Global has announced the successful amendment of its asset-based revolving loan facility (ABL), extending its maturity to November 2029. The amended ABL maintains a $750 million committed borrowing capacity with borrowing rates of Term SOFR plus 1.25% to 1.75% margin, based on the company's fixed charge coverage ratio. This transaction, combined with their recently announced 7-year Term Loan B, aims to strengthen the company's capital structure and reduce dependency on near-term capital markets for credit support.

Positive

• Extended ABL maturity to November 2029, providing long-term financial stability
• Maintained substantial $750 million borrowing capacity
• Reduced dependency on near-term capital markets for credit support
• Strengthened capital structure through combination of ABL and Term Loan B

Negative

• None.

Insights

Financial Analyst

The $750 million ABL facility renewal represents a significant financial milestone for MRC Global, extending their credit availability through 2029. The competitive borrowing rate of Term SOFR plus 1.25-1.75% margin indicates strong lender confidence. This refinancing, combined with their recent Term Loan B, strategically improves their capital structure in two key ways:

• Eliminates near-term refinancing risk by extending debt maturities
• Removes the overhang from convertible preferred stock, simplifying the equity structure

The fixed charge coverage ratio-based pricing mechanism provides potential cost savings through improved operational performance. This comprehensive refinancing positions MRC Global with enhanced financial flexibility and a more streamlined capital structure, important for navigating industry cycles in the energy services sector.

HOUSTON, Nov. 12, 2024 (GLOBE NEWSWIRE) -- MRC Global Inc. (NYSE: MRC), announced today that it has amended its asset-based revolving loan facility (“ABL”), extending its maturity to November 2029. The amended ABL has a committed borrowing capacity of $750 million.

The terms of the ABL are substantially the same as the previous facility with a borrowing rate of Term SOFR plus a margin ranging from 1.25% to 1.75%, based on the company’s fixed charge coverage ratio.

Rob Saltiel, MRC Global President & CEO stated, “We are pleased to have successfully closed on our amended ABL credit facility with favorable terms and an extended maturity. This transaction, along with our new 7-year Term Loan B announced last week that helped fund the repurchase of our convertible preferred stock, strengthens our company’s capital structure and de-risks our dependence on near-term capital markets for credit support.”

About MRC Global Inc.

Headquartered in Houston, Texas, MRC Global (NYSE: MRC) is the leading global distributor of pipe, valves, fittings (PVF) and other infrastructure products and services to diversified end-markets including the gas utilities, downstream, industrial and energy transition, and production and transmission sectors. With over 100 years of experience, MRC Global has provided customers with innovative supply chain solutions, technical product expertise and a robust digital platform from a worldwide network of over 200 locations including valve and engineering centers. The company’s unmatched quality assurance program offers over 300,000 SKUs from over 8,500 suppliers, simplifying the supply chain for approximately 10,000 customers. Find out more at www.mrcglobal.com.

Contact:
Monica Broughton
VP, Investor Relations & Treasury
MRC Global Inc.
Monica.Broughton@mrcglobal.com
832-308-2847

FAQ

What is the new borrowing capacity of MRC Global's amended ABL facility?

MRC Global's amended asset-based revolving loan facility (ABL) has a committed borrowing capacity of $750 million.

When does MRC Global's new ABL facility mature?

The amended ABL facility matures in November 2029.

What is the borrowing rate for MRC's new ABL facility?

The borrowing rate is Term SOFR plus a margin ranging from 1.25% to 1.75%, based on the company's fixed charge coverage ratio.

How does the new ABL facility benefit MRC Global's capital structure?

The amended ABL, combined with the new Term Loan B, strengthens MRC Global's capital structure and reduces dependence on near-term capital markets for credit support.