GrafTech International Ltd. (NYSE: EAF) (“GrafTech” or the “Company”) today announced that it has entered into a commitment and consent letter with lenders holding all of its existing revolving commitments, an ad hoc group that holds over 81% of its existing secured bonds to provide new debt financing on competitive terms and extend maturities of its existing debt, and Barclays Bank plc, as a fronting lender.
Pursuant to the terms of the commitment and consent letter, GrafTech expects to (i) incur $175 million of new senior secured first lien term loans on the closing date of the transaction (the “Closing Date”), and obtain commitments with respect to $100 million of new senior secured first lien delayed draw term loans that are available to the Company for 19 months following the Closing Date, all of which would mature five years after the Closing Date; (ii) launch offers to exchange its outstanding 4.625% senior secured notes due 2028 and its 9.875% senior secured notes due 2028 for new 4.625% second lien notes and new 9.875% second lien notes, respectively, which would mature in 2029; (iii) launch a consent solicitation to eliminate substantially all covenants and events of default with respect to its outstanding senior secured notes due 2028, and release the collateral securing such notes; and (iv) enter into a new revolving credit facility that, among other things, would replace GrafTech’s existing revolving commitments with up to $225 million of new first lien revolving commitments and extend the maturity date from May 2027 to November 2028, subject to a springing maturity date based on inside maturities of existing debt (collectively, the “Transactions”). The consummation of the Transactions is subject to the satisfaction or waiver of a number of customary closing conditions. On an as adjusted basis after giving effect to the Transactions, the Company’s liquidity as of September 30, 2024 would have increased from $254 million to $529 million.
“The new money debt financing and maturity extension will provide enhanced liquidity and operational flexibility as we continue to manage through the near-term industry-wide challenges facing GrafTech,” said Timothy Flanagan, Chief Executive Officer and President of the Company. “We look forward to strengthening our financial foundation and appreciate and are encouraged by the strong support of our financial partners, which highlights their confidence in the Company’s future. GrafTech looks forward to continuing to support its customers with our high-quality products and technical services.”
Kirkland & Ellis LLP and Evercore are serving as legal and financial advisors to GrafTech. Davis Polk & Wardwell LLP and PJT Partners LP are serving as legal and financial advisors to an ad hoc group of holders of GrafTech’s existing senior notes. Simpson Thacher & Bartlett LLP is serving as legal advisor to the revolving lenders.
This communication is not intended to and does not constitute an offer to sell, buy or subscribe for any securities or otherwise, nor shall there be any sale, issuance, or transfer of securities in any jurisdiction in contravention of applicable law. In particular, this communication is not an offer of securities for sale into the United States. No offer of securities shall be made in the United States absent registration under the Securities Act of 1933, as amended, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements.
