Algoma Pays Up to Refinance, May Flex Higher

Essar Steel Algoma, the Canadian steelmaker that had been downgraded by S&P twice since April, said it is refinancing a maturing revolver with a term loan that pays at least 575 basis points more margin over Libor.

Deutsche Bank has been marketing a $350 million term loan at 750 basis points over Libor, compared with the 175 basis point margin on the five-year-old revolver, which matures Sept. 20, according to data compiled by Bloomberg. The spread could increase an additional 200 basis points if the Supreme Court of Canada makes a “negative” ruling on a case it is hearing about aluminum manufacturer Indalex, Bloomberg data show.

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