MRC Global announces actions to strengthen capital structure

MRC Global has agreed to repurchase all 363,000 shares of its 6.50% Series A Convertible Perpetual Preferred Stock as part of an agreement with Mario Investments, LLC, the holder of the preferred stock, which is contingent upon, among other things, the completion of a successful term loan financing. Upon satisfaction of the required conditions in the repurchase agreement, the company will repurchase the preferred stock for a total payment of approximately $361 million, representing 99.5% of the liquidation preference of the preferred stock. The company will also pay accrued dividends through the closing date of the repurchase. MRC Global expects to finance the repurchase with a new senior secured term loan “B” and a combination of existing cash or borrowings from the company’s asset-based lending facility. In order to finance the repurchase of the preferred stock, MRC Global is launching later today a $350 million Term Loan B financing with an expected term of seven years. The company is also pursuing an amendment to its ABL facility that would extend its term until 2029. Post-transaction, the company’s net debt leverage ratio is expected to be less than 2 times, based on the previous twelve months of adjusted EBITDA.