Outstanding Debt Remains Unchanged; Net Debt to Adjusted EBITDA Ratio Remains at All-Time Low
Fresh off beating analyst guidance by 30%, Barranquilla based glass and aluminum manufacturer Tecnoglass, Inc. (NASDAQ: TGLS) announced last week that it has amended its senior secured revolving credit facility to increase the borrowing capacity under its committed Line of credit from $50 million to $150 million, reduce its borrowing costs by an approximate 130 basis points, and extend the initial maturity date by one year to the end of 2026.
Borrowings under the credit facility will now bear interest at a rate of LIBOR with no floor plus a spread of 1.75%, based on the company’s net leverage ratio, compared to a prior rate of LIBOR with a floor of 0.75% plus a spread of 2.50%. The company expects the amendments to provide approximately $3 million of incremental interest expense savings on an annual basis at current outstanding borrowings.
“We’re extremely proud of our outstanding track record of financial performance and cash generation. Today’s announcement further demonstrates to our customers, employees, partners and shareholders that our business momentum is very strong and our growth investments are paying off. This transaction, which was widely oversubscribed, reduces our cost of capital while significantly enhancing our liquidity and financial flexibility. Through this refinancing, we now estimate total annual savings of approximately $15 million at current levels of outstanding borrowings, since entering into our inaugural US Bank syndicated facility in October of 2020,” said Santiago Giraldo, Tecnoglass Chief Financial Officer.
The facility was led by PNC Bank N.A as Administrative Agent; with Citizens Bank N.A, BBVA USA, CIT Bank and Wells Fargo Bank N.A serving as Joint Lead Arrangers.
“This upsized revolver positions us exceptionally well to fund future growth initiatives and to further capitalize on opportunities in the quarters and years ahead. We are extremely encouraged by the overwhelming support received by the syndicate of US and European based banks that understood the strong tailwinds in our business as well as our structural competitive advantages that are allowing us to outpace the industry and gain incremental market share. The syndicate composition and the financial costs achieved in this transaction validate the success of our strategy as a ‘US centric’ company,” added Giraldo.
The deal increases the currently untapped committed facility from $50 Million to $150 Million And reduces all-in interest from 3.25% to 1.90% at current rates.