Tecnoglass Enters Into $300 Million USD Credit Facility

Tecnoglass Inc., a manufacturer of architectural glass, windows and associated aluminum products for the global commercial and residential construction industries, has entered into a new $300 million senior secured credit facility consisting of a $250 million delayed draw term loan and a $50 million committed revolving credit facility, with a maturity date in 2025.

The credit facility has an accordion feature allowing the company to increase the borrowing capacity to $325 million. The credit facility will bear interest at a rate of LIBOR, with a 0.75% floor, plus a spread of between 2.5% and 3.5%, based on Tecnoglass’ net leverage ratio. Under the terms of the agreement, the facility will have an initial interest rate spread of 3%, which the company expects to decrease to a spread of 2.75% in April 2021.

Tecnoglass intends to use the net proceeds to repay all outstanding borrowings under its previous credit facilities. The company’s existing $210 million unsecured senior notes, which bear interest at a rate of 8.2% and mature in 2022, are expected to be redeemed in full following a step down in redemption price at the end of January 2021. Tecnoglass plans to use the remaining proceeds and available cash for ongoing working capital needs and general corporate purposes.

“This larger facility, with its improved pricing and flexibility, is supported by a very strong syndication of U.S. and European based lenders who underwrote this agreement with a clear recognition of Tecnoglass as a solid U.S.-focused company,” says Santiago Giraldo, Tecnoglass chief financial officer. “The significantly improved terms of the facility underscore our record of growth, our improved cash generation, and our greater than 90% of revenues derived from the U.S. We believe the significant reduction of our cost of capital, including anticipated annual cash interest savings of approximately $11 million on current outstanding borrowings, positions us exceptionally well to fund growth initiatives and to further capitalize on market opportunities.”

BBVA USA acted as administrative agent, with Citizens Bank, N.A., ING Bank N.V. and Sabadell Bank acting as joint lead arrangers for the credit facility.

Separately, the company completed the previously-disclosed purchase of a land parcel, which will be contributed to its Vidrio Andino joint venture with Saint-Gobain to be used for the construction of a new float glass manufacturing facility located near Barranquilla, Colombia. The land transaction was completed on October 28, 2020 for a purchase price of $10.9 million in aggregate value, paid in Tecnoglass ordinary shares issued at a price of $7 per share, which represents an approximate 33% premium based on the stock price as of the closing date of October 27, 2020.

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