Key Highlights

• Worthington Steel (NYSE: WS) finalized a $550 million asset-based revolving credit facility to support its Klöckner acquisition and general corporate needs.

• The new agreement allows uncommitted increases up to $200 million and committed expansions to $650 million under specified conditions.

• Borrowings under the facility carry interest rates tied to SOFR or base rates, with applicable margins ranging from 0.250% to 1.375%.

• The credit line matures in 2031 and replaces a prior $550 million facility set to expire in 2028.

New Credit Facility Announced

Worthington Steel (NYSE: WS) has replaced its existing revolving credit line with a $550 million asset-based lending agreement. The new facility, signed on June 25, 2026, provides enhanced flexibility for funding the company’s Klöckner acquisition and ongoing operations.

Expanded Borrowing Capacity

The agreement permits Worthington Steel to increase its borrowing capacity by up to $200 million without lender consent. Under specific conditions, the company may also secure a committed expansion of at least $550 million, potentially raising the total to $650 million.

Interest and Fee Structure

Borrowings under the facility accrue interest at either a base rate or SOFR, with applicable margins fluctuating based on availability. Rates include a floor of 0% and margins ranging from 0.250% to 1.375%, depending on the chosen benchmark and excess availability thresholds.

Financial Covenants and Security

The credit agreement requires Worthington Steel to maintain a minimum fixed charge coverage ratio of 1.00 to 1.00 during periods of reduced liquidity. The facility is secured by liens on substantially all company assets, governed by an intercreditor agreement with existing term loan and bond holders.

Termination of Prior Agreement

The new facility replaces a $550 million revolving credit line established in 2023, which was set to mature in November 2028. Upon termination, all security interests under the prior agreement were released.

Use of Proceeds

Funds from the facility will finance the Klöckner acquisition, working capital needs, and general corporate purposes. The agreement also supports swingline loans up to 10% of the facility’s maximum amount and letters of credit up to $55 million.

Maturity and Default Provisions

The credit line matures on June 25, 2031, with customary events of default triggering a 2.0% interest rate increase until resolved. The agreement includes standard reporting requirements and lender protections.

 

This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial adviser before making investment decisions.