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Fiberglass yarn producer AGY completes debt restructuring

02 Jul '13

5 min read

AGY Holding Corp., a Delaware corporation (“AGY”), and KAGY Holding Company, Inc., the direct parent company of AGY (“KAGY,” and together with AGY, the “Companies”), announced that they have entered into a series of agreements for the restructuring of the Companies’ business and exchange of certain of AGY’s outstanding 11% senior second lien notes due 2014 (the “Old Notes”) (collectively, the “Restructuring”). A description of these agreements has been included in our Form 8-K filed with the Securities and Exchange Commission and are briefly summarized below.

“AGY is pleased to successfully complete the restructuring described above. We believe that this milestone is the culmination of 18 months of effort to improve our operational capabilities, refine our strategy and create a sound financial platform”

1. Exchange Transaction -- Approximately 93% in aggregate principal amount of the holders of Old Notes exchanged their outstanding Old Notes for the following consideration: (A) shares of convertible participating preferred stock (“Series A Preferred Stock”) of KAGY having an initial liquidation preference amount equal to 50% of the principal amount of Old Notes exchanged plus 50% of the accrued and unpaid interest through May 15, 2013 on the Old Notes exchanged and (B) new 11% Senior Second Lien Notes (the “New Notes”) of AGY with an extended maturity of December 15, 2016 having a principal amount equal to 50% of the principal amount of Old Notes exchanged. The New Notes will be “144A-for-life” and neither the New Notes nor the Series A Preferred Stock have been or will be registered under the Securities Act of 1933.

2. Amendment of Old Notes Indenture -- The indenture governing the Old Notes was amended to eliminate substantially all of the covenants and collateral provisions and certain events of default applicable to the Old Notes in connection with the closing of the exchange transaction.

3. Amendment of Master Lease Agreement -- The Companies entered into a Second Amended and Restated Master Lease Agreement (the “Amended Metals Facility”) with DB Energy Trading LLC (“DB”), to be syndicated to a group of participants arranged by DB. The Amended Metals Facility extends the term of the lease agreement through June 15, 2016 and, among other things, permits AGY to lease up to 51,057 Troy ounces of platinum and 3,308 Troy ounces of rhodium, two of the alloy metals used in AGY’s manufacturing operations.

4. Amendment of ABL Facility -- AGY entered into a Second Amendment to Amended and Restated Loan and Security Agreement (the “ABL Amendment”) with UBS AG, Stamford Branch and UBS Securities LLC. Among other things, the ABL Amendment provides that the maturity of the facility shall be no earlier than June 15, 2016 and provides for a reduction of 25 basis points in the applicable margin. The amended facility is a $60 million senior secured revolving credit facility.