This year is shaping up to be a great year for slush pulp and paper production at our seven communication paper mills. Both slush pulp and paper are running at record-level production thanks to our colleagues across our Pulp and Paper business and our continuous improvement efforts. Given the current market demand for paper, our strong performance couldn’t have come at a better time. Paper productivity in the third quarter at our seven communication paper mills (Hawesville, Johnsonburg, Kingsport, Marlboro, Nekoosa, Rothschild and Windsor) exceeded budget by 80 short tons per day. At the same time, daily production of slush pulp — wood fiber that’s been cooked down and bleached to a consistency perfect for making paper or market pulp –— surpassed the third quarter budget by nearly 200 air-dried metric tons per day. That’s a new company record for quarterly slush pulp production, which helped deliver a successful third quarter for the business. Click read more below for additional detail.
Resolute Forest Products Inc. announced a 5-year extension of its senior secured asset-based revolving credit facility (“ABL credit facility”) with an aggregate lender commitment of up to $500 million at any time outstanding, subject to borrowing base availability based on specified advance rates, eligibility criteria and customary reserves.
“This successful extension improves certain terms and conditions, and supports the execution of our growth and transformation initiatives for the future,” said Yves Laflamme, president and chief executive officer. “By renewing and extending the ABL through May 2024, we are taking advantage of our strong financial position and of attractive bank market conditions to lock-in a competitive source of liquidity for the long-term,” added Remi Lalonde, senior vice president and chief financial officer.
The ABL facility is completely undrawn, with the exception of approximately $51 million of ordinary course letters of credit outstanding. The extension of the ABL credit facility includes a number of modifications, including a voluntary reduction in the lenders commitment of $100 million, which will lower fees while preserving the current available liquidity. The $500 million facility includes a $300 million tranche available to Resolute’s U.S. borrowers and its Canadian borrowers, as well as a $200 million tranche available only to its U.S. borrowers, in each case subject to the borrowing base availability of those borrowers. The facility includes a $60 million swingline sub-facility and a $200 million letter of credit sub-facility. The credit agreement also provides for an uncommitted ability to increase the revolving credit facility by up to $500 million, subject to certain terms and conditions.
The credit agreement for the ABL facility contains customary covenants, representations and warranties, and events of default for asset-based credit agreements of this type. The company’s obligations under the facility are guaranteed by certain material subsidiaries and they are secured by first priority liens on accounts receivable, inventory and related assets.
The ABL credit facility is provided by a syndicate of six banks, with Bank of America as administrative agent and collateral agent. Bank of America, Wells Fargo and Bank of Montreal acted as joint lead arrangers and joint bookrunners; CIBC and TD acted as co-documentation agents.
Troutman Sanders LLP and McCarthy Tétrault LLP represented Resolute.