Universal Stainless and PNC enter into credit agreement

Universal Stainless & Alloy Products, Inc. announced that it has entered into a new credit agreement with PNC Bank providing for a $12.0 million term loan scheduled to mature in 2014 and a $15.0 million revolving credit facility with a term expiring in 2012. The new agreement replaces the company’s existing revolving credit agreement that was set to expire June 30, 2009.

The company intends to use the borrowings under the term loan to fund its previously announced capital investment program totaling $13 million in its Bridgeville melt shop and other related costs.

The investment is for major upgrades in equipment, automation and plant layout, including installation of a 50-ton electric arc furnace shell, upgrade of alloy addition equipment at the Argon-Oxygen Decarburization (AOD) unit, and the addition of new ladle preheating equipment.

The equipment and infrastructure spending is expected to be completed by the end of 2009 and the automation spending is scheduled to be completed by the middle of 2010.

The investment is expected to yield annual cost savings of more than $7.5 million beginning in the 2009 fourth quarter.