Algoma Steel increases ABL facility to $375M (U.S.)

Executive Summary

• Algoma Steel Group Inc. has amended its asset-based revolving credit (ABL) facility to increase aggregate commitments from $300 million (U.S.) to $375 million (U.S.).
• The incremental $75 million (U.S.) is provided by Export Development Canada (EDC), which joins the existing lending syndicate as a direct lender.
• The transaction is part of broader liquidity initiatives to strengthen Algoma's financial position and support its transformation to electric arc furnace steelmaking.

Key Details

• Facility Increase: Aggregate commitments under the asset-based revolving credit facility increased by $75 million (U.S.), bringing the total to $375 million (U.S.).
• New Lender: Export Development Canada (EDC) joined the existing lending syndicate as a direct lender under the ABL facility.
• Existing Lenders: Wells Fargo and BMO Capital Markets remain part of the lending group.
• Collateral: The ABL facility remains secured by a first-priority lien on accounts receivable, inventory, and related assets of Algoma and its subsidiaries.
• Strategic Context: The upsizing provides enhanced financial flexibility to navigate challenging market conditions, including tariffs, and supports the company's transformation to electric arc furnace steelmaking.

Notable Quotes

• "Despite the challenging market conditions brought on by tariffs, this upsizing of our ABL facility, and the addition of EDC to our banking group, provides Algoma with enhanced financial flexibility to support our operations and strategic priorities," said Rajat Marwah, chief financial officer of Algoma.
• "The continued support of our lenders, Wells Fargo and BMO Capital Markets, and the participation of EDC reflect confidence in Algoma's transformation to electric arc furnace steelmaking and our long-term competitiveness as a sustainable Canadian steel producer," said Rajat Marwah.