Ferro Refinances and Expands Credit Facility to Optimize Capital Structure
April 26 2018 - 4:15PM
Business Wire
Ferro Corporation (NYSE: FOE, the “Company”), announced today
that it has successfully closed on a new $820 million
senior-secured term loan facility and increased its senior-secured
revolving credit facility to $500 million. The Company will use the
proceeds to repay outstanding balances on its prior facility.
The refinancing attracted significant interest in the lending
community, allowing the Company to secure attractive pricing while
extending the debt maturity of the revolving credit facility.
The debt facility includes the following:
1) $355 million term loan,
maturing 2024 Interest rate of LIBOR + 225 bps 2) $235
million term loan, maturing 2024 Interest rate of LIBOR + 225 bps
3)
$230 million term loan, raised at a German
subsidiary, maturing 2024
Initial interest rate of LIBOR + 225 bps 4) $500 million
revolving credit line, maturing 2023 Initial interest rate of LIBOR
+ 200 bps
“This refinancing reflects our ongoing efforts to optimize our
capital structure, and provides continuing financial flexibility to
pursue our innovation and optimization strategy. We are very
pleased with the strong demonstration of support from our finance
partners,” said Peter Thomas, Ferro Chairman, President and
CEO.
Deutsche Bank Securities Inc. and PNC acted as joint lead
arrangers on the debt facilities.
About Ferro Corporation
Ferro Corporation (www.ferro.com) is a leading global supplier
of technology-based functional coatings and color solutions. Ferro
supplies functional coatings for glass, metal, ceramic and other
substrates and color solutions in the form of specialty pigments
and colorants for a broad range of industries and applications.
Ferro products are sold into the building and construction,
automotive, electronics, industrial products, household furnishings
and appliance markets. The Company’s reportable segments include:
Performance Coatings (metal and ceramic coatings), Performance
Colors and Glass (glass coatings), and Color Solutions.
Headquartered in Mayfield Heights, Ohio, the Company has
approximately 5,680 associates globally and reported 2017 sales of
$1.4 billion.
Cautionary Note on Forward-Looking Statements
Certain statements in this press release may constitute
“forward-looking statements” within the meaning of federal
securities laws. These statements are subject to a variety of
uncertainties, unknown risks, and other factors concerning the
Company’s operations and business environment. Important factors
that could cause actual results to differ materially from those
suggested by these forward-looking statements and that could
adversely affect the Company’s future financial performance include
the following:
- demand in the industries into which
Ferro sells its products may be unpredictable, cyclical, or heavily
influenced by consumer spending;
- the effectiveness of the Company’s
efforts to improve operating margins through sales growth, price
increases, productivity gains, and improved purchasing
techniques;
- currency conversion rates and economic,
social, political, and regulatory conditions in the U.S. and around
the world;
- challenges associated with a
multi-national company such as Ferro competing lawfully with local
competitors in certain regions of the world;
- our ability to implement and/or
administer optimization initiatives including investments and
restructuring programs to rationalize our operations and improve
operating performance;
- Ferro’s ability to successfully
introduce new products and services or enter into new growth
markets;
- Ferro’s ability to identify suitable
acquisition candidates, complete acquisitions, effectively
integrate the acquired businesses and achieve the expected
synergies, as well as the acquisitions being accretive and Ferro
achieving the expected returns on invested capital;
- the impact of damage to, or the
interruption, failure or compromise of the Company’s information
systems;
- the implementation and operations of
business information systems and processes;
- compliance costs associated with
domestic and international laws, rules, policies and other
obligations regarding data protection;
- restrictive covenants in the Company’s
credit facilities could affect its strategic initiatives and
liquidity;
- Ferro’s ability to access capital
markets, borrowings, or financial transactions;
- the availability of reliable sources of
energy and raw materials at a reasonable cost;
- increasingly aggressive domestic and
foreign governmental regulation of hazardous and other materials
and regulations affecting health, safety and the environment;
- sale of products and materials into
highly regulated industries;
- our ability to address safety, human
health, product liability and environmental risks associated with
our current and historical products, product life cycle and
production processes;
- competitive factors, including intense
price competition;
- Ferro’s ability to protect its
intellectual property, including trade secrets, or to successfully
resolve claims of infringement brought against it;
- limited or no redundancy for certain of
the Company’s manufacturing facilities and possible interruption of
operations at those facilities;
- management of Ferro’s general and
administrative expenses;
- Ferro’s multi-jurisdictional tax
structure and its ability to reduce its effective tax rate,
including the impact of the Company’s performance on its ability to
utilize significant deferred tax assets;
- the effectiveness of strategies to
increase Ferro’s return on invested capital, and the short-term
impact that acquisitions may have on return on invested
capital;
- stringent labor and employment laws and
relationships with the Company’s employees;
- the impact of requirements to fund
employee benefit costs, especially post-retirement costs;
- implementation and operation of
business processes and information systems, including the
outsourcing of functions to third parties;
- risks associated with the manufacture
and sale of material into industries making products for sensitive
applications;
- the impact of the Tax Cut and Job Act
on our business;
- exposure to lawsuits, governmental
investigations and proceedings relating to current and historical
operations and products;
- risks and uncertainties associated with
intangible assets;
- Ferro’s borrowing costs could be
affected adversely by interest rate increases;
- liens on the Company’s assets by its
lenders affect its ability to dispose of property and
businesses;
- amount and timing of any repurchase of
Ferro’s common stock; and
- other factors affecting the Company’s
business that are beyond its control, including disasters,
accidents and governmental actions.
The risks and uncertainties identified above are not the only
risks the Company faces. Additional risks and uncertainties not
presently known to the Company or that it currently believes to be
immaterial also may adversely affect the Company. Should any known
or unknown risks and uncertainties develop into actual events,
these developments could have material adverse effects on our
business, financial condition and results of operations.
This release contains time-sensitive information that reflects
management’s best analysis only as of the date of this release. The
Company does not undertake any obligation to publicly update or
revise any forward-looking statements to reflect future events,
information, or circumstances that arise after the date of this
release.
Additional information regarding these risks can be found in our
Annual Report on Form 10-K for the year ended December 31,
2017.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180426006531/en/
Ferro CorporationInvestor Contact:Kevin Cornelius Grant,
216-875-5451Head of Investor
Relationskevincornelius.grant@ferro.comorMedia Contact:Mary
Abood, 216-875-5401Director, Corporate
Communicationsmary.abood@ferro.com
Ferro (NYSE:FOE)
Historical Stock Chart
From Jun 2024 to Jul 2024
Ferro (NYSE:FOE)
Historical Stock Chart
From Jul 2023 to Jul 2024