Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) today announced that it has entered into a new senior secured credit agreement with an aggregate lender commitment of up to $185 million. The agreement is comprised of a $46.25 million nine-year term loan and a $138.75 million six-year revolving credit facility.
"We took advantage of favorable market conditions to increase our already solid liquidity levels by 50 percent to about $535 million. These new facilities provide us flexible terms and conditions, long maturities, and no repayment penalties," said Jo-Ann Longworth, senior vice president and chief financial officer. "They also represent an excellent opportunity to secure additional liquidity at very competitive rates and will further enhance our flexibility in the execution of our growth and diversification strategy."
The company's immediate intentions are to use proceeds of the new credit facilities to repay most of the current balance on its existing ABL revolving credit facility. Both the existing and the new revolving credit facilities will then be used, as required, for general corporate purposes, notably to complete the funding requirements related to the company's tissue project at its Calhoun (Tennessee) mill.
The new credit agreement contains customary covenants, representations, and warranties and events of default for credit agreements of this type. Resolute's obligations under the facilities are guaranteed by certain material U.S. subsidiaries and are secured by first priority liens on assets located at the Calhoun mill. The credit agreement also provides for an uncommitted ability to increase the facilities by up to $175 million, subject to certain terms and conditions.
The new financing was arranged and syndicated by American AgCredit. Troutman Sanders LLP represented Resolute, assisted by Bass Berry & Sims.
About Resolute Forest Products
Resolute Forest Products is a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products, newsprint and specialty papers. The company owns or operates over 40 pulp, paper, tissue and wood products facilities in the United States, Canada and South Korea, as well as power generation assets in Canada and the United States. Marketing its products in close to 80 countries, Resolute has third-party certified 100% of its managed woodlands to internationally recognized sustainable forest management standards. The shares of Resolute Forest Products trade under the stock symbol RFP on both the New York Stock Exchange and the Toronto Stock Exchange.
Resolute has received regional, North American and global recognition for its leadership in corporate social responsibility and sustainable development, as well as for its business practices. Visit resolutefp.com for more information.