One of the leading distributors of pipes, valves and fittings,
MRC Global Inc.
), re-priced and increased its senior secured term loan facility
by $150 million. The move will enable the company to reduce
MRC Global's move enabled it to reduce the term loan's annual
interest rate by 100 basis points (bps), to London Interbank
Offered Rate (LIBOR) plus 400 (bps). Additionally, the LIBOR
floor on the same has contracted to 1.00% from 1.25%.
In 2012, the company borrowed the seven-year senior secured
Term Loan B facility worth $650 million, set to mature in Nov
2019. As of Sep 30, 2013, MRC Global had an outstanding term loan
worth $643.5 million. The company is obligated to repay the term
loan utilizing certain asset sales, insurance and debt proceeds
along with 50% of excess cash flow.
The total size of the term loan, after the upgrade, is $793.5
million. It was borrowed by MRC Global's wholly-owned subsidiary
McJunkin Red Man Corporation.
In addition to the term loan, the company also has a $1.25
billion multi-currency global asset-based revolving credit
facility, scheduled to mature in Mar 2017. MRC Global had funds
of $573.0 million available under this credit facility as on Sep
The company has undertaken the upsizing in a favorable
interest environment which complements its strong credit profile.
The proceeds will be utilized for acquisitions in the energy
business, expanding its global presence.
For MRC Global, whose liquidity, including cash from operating
activities, existing cash in hand and revolving credit facility,
amounted to $606.0 million as of Sep 30, 2013, the aforementioned
moves will help improve its financial flexibility and incur lower
cost of capital. Therefore, they are strategic steps for the
company to continue with its cost management activities.
MRC Global currently carries a Zacks Rank #3 (Hold). Other
stocks in the industry worth considering include
Mueller Water Products, Inc.
). All these carry a Zacks Rank #2 (Buy).
FLOWSERVE CORP (FLS): Free Stock Analysis
GRAHAM CORP (GHM): Free Stock Analysis Report
MRC GLOBAL INC (MRC): Free Stock Analysis
MUELLER WATER (MWA): Free Stock Analysis
To read this article on Zacks.com click here.