Stemcor closes oversubscribed Revolving Credit Facility

Stemcor, the world’s largest independent steel trader, today announced the completion and signing of a US$562,000,000 364 day Revolving Credit Facility (RCF) and a US$125,500,000 2 year Forward Start Facility (FSF).

The deal was launched at the end of March with BNP Paribas, Fortis Bank (Nederland) N.V., ING Bank N.V., The Royal Bank of Scotland plc, Société Générale Corporate & Investment Banking and Standard Chartered Bank appointed as Mandated Lead Arrangers and Bookrunners. Credit Europe Bank N.V., Credit Suisse AG and Development Bank of Singapore were appointed as Mandated Lead Arrangers, with Commonwealth Bank of Australia as Lead Arranger. At closing additional Mandated Lead Arrangers were  Credit Agricole (Suisse), Garanti Bank International and Nedbank.

The syndicate comprised a total of 38 lending banks and, due to significant oversubscription, the RCF was increased from the launch amount of US$400,000,000 to US$562,000,000 and the FSF from US$100,000,000 to US$125,500,000.

The 364 day RCF will be used to refinance Stemcor’s existing RCF dated 6th May 2009 and for general corporate purposes. The FSF will be used to refinance Stemcor’s existing 3-year Facility dated 13th May 2008 and for general commercial purposes in the ordinary course of business.

Michael Broom, Group Director of Treasury and Risk at Stemcor, said: “2009 was a tough year for all participants in the steel supply chain and, with lower volumes traded, we reduced borrowings to reflect lower working capital requirements. Given a strong performance in the opening months of 2010, a healthy forward order book and encouraging forecasts from independent market commentators, our banking partners share Stemcor’s confidence that the strong trading performance delivered in Q1 can be sustained and that 2010 should be a year of marked recovery. Prices are currently weakening after several months of appreciation and we must be wary of a double dip recession: however, Stemcor’s management believes that this is a correction and that we are not going to see a price collapse like the one we experienced in 2008. On that basis we have taken advantage of the oversubscription and closed at a level substantially higher than that quoted at launch.”