August 21, 2014 7:55 AM ET

Metals and Mining

Company Overview of Flag Intermediate Holdings Corporation

Company Overview

Flag Intermediate Holdings Corporation, through its subsidiary, Metals USA, Inc., provides processed carbon steel, stainless steel, aluminum, red metals, and manufactured metal components, as well as inventory management services in the United States and Canada. The company operates through three segments: Plates and Shapes, Flat Rolled and Non-Ferrous, and Building Products. The Plates and Shapes segment offers carbon products, such as structural plates, beams, bars, and tubing products; and provides processing services, including cutting, cambering/leveling, punching, bending, shearing, cut-to-length, blast and paint, and tee-splitting services. The Flat Rolled and Non-Ferrous segment offe...

2400 East Commercial Boulevard

Suite 905

Fort Lauderdale, FL 33308

United States

2,200 Employees

Phone:

954-202-4000

Fax:

954-202-0271

Key Executives for Flag Intermediate Holdings Corporation

Chairman
Age: 56
Chief Financial Officer and Senior Vice President
Age: 50
President of Plates & Shapes - West
Age: 61
Principal Accounting Officer
Senior Vice President of Business Development
Age: 49
Compensation as of Fiscal Year 2014.

Flag Intermediate Holdings Corporation Key Developments

Flag Intermediate Holdings Corporation and Metals USA, Inc. Enter into Credit Agreement with Certain Lenders and Credit Suisse AG

Flag Intermediate Holdings Corporation and Metals USA, Inc. entered into a Credit Agreement with certain lenders and Credit Suisse AG, as administrative agent. Each of Flag Intermediate and Metals USA is a wholly-owned subsidiary of Metals USA Holdings Corp. The Credit Agreement provides for a new seven year senior secured term loan to Metals USA in the amount of $225 million. The Term Loan will amortize in equal quarterly installments during its term, commencing on March 31, 2013, in an aggregate annual amount equal to 1.00% of the original principal amount of the Term Loan with the remainder due at maturity. The Term Loan bears interest, at Metals USA’s election, at an annual rate of either (1) the greater of a base rate and 2.25%, plus a margin of 4.00% or (2) the greater of LIBOR and 1.25%, plus a margin of 5.00%. The Term Loan was issued at an original issue discount of 1.00%. Metals USA are the borrower under the Credit Agreement. All of Metals USA’s obligations under the Credit Agreement are and will be guaranteed by Flag Intermediate and all of Metals USA’s existing and future domestic subsidiaries, except as provided in the Credit Agreement. The Credit Agreement contains certain customary negative covenants that limit or restrict the ability of Metals USA and certain of its subsidiaries to take certain actions. Subject to specified exceptions, these covenants limit the ability of Metals USA and certain of its subsidiaries to, among other things, incur indebtedness; create liens and encumbrances; make acquisitions and investments; dispose of or transfer assets; pay dividends or make other payments in respect of their capital stock; engage in transactions with affiliates; and change their business. Among other exceptions to these covenants, the Credit Agreement includes a $15 million annual dividend basket in order to permit the distribution of funds by Metals USA to the Company for the payment of the company’s previously announced regular quarterly dividend on the Company’s common stock, subject to declaration by the company’s board of directors. The Credit Agreement also contains customary affirmative covenants requiring, among other things, maintenance of corporate existence, licenses, properties and insurance; compliance with laws, payment of taxes and performance of other material obligations; and delivery of financial and other information to the lenders under the Credit Agreement. The Credit Agreement contains customary mandatory prepayment provisions, including a requirement to, subject to certain exceptions, prepay the Term Loan using (1) 100% of the net cash proceeds of any non-ordinary course of business asset sales that are not re-invested in the business of the Company as permitted by the Credit Agreement and (2) 50% (subject to reduction to 25% or 0% if Metals USA achieves certain leverage targets) of annual excess cash flow, as defined in the Credit Agreement. The Credit Agreement permits voluntary prepayments of the Term Loan subject to certain restrictions.

Flag Intermediate Holdings Corporation Intends to Enter into New Seven Year Senior Secured Term Loan in the Amount of $225 Million

Flag Intermediate Holdings Corporation announced that it has received commitments for and intends to enter into a new seven year senior secured term loan in the amount of $225 million. The new term loan is expected to bear interest at LIBOR plus 5.0%, and includes a 1.25% LIBOR floor and 1% of original issue discount. The interest rate is expected to be 6.25% at the closing of the term loan, compared to an interest rate of 11 1/8% on Metals USA's outstanding Senior Secured Notes due 2015. The proceeds of the term loan will be used to refinance the Notes. Redemption of the Notes will occur on December 14, 2012 pursuant to the notice of redemption that has been issued to holders of the Notes.

Flag Intermediate Holdings Corporation Enters into New Term Loan in an Amount of Approximately $275 Million

Flag Intermediate Holdings Corporation announced that it will seek to enter into a new term loan in an amount of approximately $275 million. The proceeds of the term loan would be used to refinance Metal USA's outstanding 11 1/8% Senior Secured Notes due 2015; reduce borrowings under the company's existing asset based loan; pay costs, expenses and fees associated with the new term loan and the Notes refinancing; and for general corporate purposes, including working capital. The timing and size of any potential financing and the use of proceeds thereof are subject to market and other conditions, and Metals USA makes no assurance that such actions will take place at any specific time, or at all.

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