Mercer International Inc. Announces Completion of CDN$160 Million Revolving Credit Facility

Rhea-AI Summary

Mercer International has secured a new CDN$160 million joint asset-backed revolving credit facility with a group of North American banks, replacing two existing facilities totaling CDN$100 million. This five-year facility is intended for general corporate purposes and is secured by the assets of its Canadian subsidiaries. Interest rates will vary based on a borrowing base and leverage ratio. Mercer's operations span Germany and Canada, with an annual production capacity of 2.2 million tonnes of pulp and 550 million board feet of lumber.

Positive

• Secured CDN$160 million credit facility enhances liquidity.
• Replaces existing CDN$100 million facilities, providing better financial terms.

Negative

• Facility tied to leverage ratios may indicate high indebtedness risk.
• Credit terms linked to variable interest rates could increase cost under certain conditions.

NEW YORK, Jan. 21, 2022 (GLOBE NEWSWIRE) -- Mercer International Inc., or "Mercer", (Nasdaq: MERC) today announced that certain Canadian subsidiaries (the "Loan Parties") of Mercer have entered into a new CDN$160 million joint asset-backed revolving credit facility (the "New Facility") with a syndicate of North American bank lenders. The New Facility, which will be used for general corporate purposes, replaces two existing revolving credit facilities of certain of the Loan Parties aggregating CDN$100 million.

The New Facility has a five year term and availability is based on a borrowing base. The New Facility is secured by substantially all of the Loan Parties' assets. The New Facility will bear interest at a rate determined by reference to the Prime Rate, the BA Rate, the Base Rate or Adjusted Term SOFR plus a margin, depending on the leverage ratio, as defined in the New Facility.

Mercer International Inc. is a global forest products company with operations in Germany and Canada with consolidated annual production capacity of 2.2 million tonnes of pulp and 550 million board feet of lumber. To obtain further information on the company, please visit its web site at https://www.mercerint.com.

The preceding includes forward looking statements which involve known and unknown risks and uncertainties which may cause our actual results in future periods to differ materially from forecasted results. Words such as "expects", "anticipates", "projects", "intends", "designed", "will", "believes", "estimates", "may", "could" and variations of such words and similar expressions are intended to identify such forward-looking statements. Actual results and outcomes may differ materially from what is expressed or forecasted in these forward looking statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Among those factors which could cause actual results to differ materially are the following: the highly cyclical nature of our business, raw material costs, our level of indebtedness, competition, foreign exchange and interest rate fluctuations, our use of derivatives, expenditures for capital projects, environmental regulation and compliance, disruptions to our production, market conditions and other risk factors listed from time to time in our SEC reports.

APPROVED BY: Jimmy S.H. Lee Executive Chairman (604) 684-1099 David M. Gandossi Chief Executive Officer (604) 684-1099

FAQ

What is the significance of Mercer International's new CDN$160 million credit facility?

The new credit facility enhances Mercer's liquidity and replaces older agreements, allowing for improved financial management.

How does the new credit facility impact Mercer International's financial strategy?

The facility is intended for general corporate purposes, indicating a strategy to strengthen financial stability and operational flexibility.

What are the terms of Mercer's new credit facility?

The facility has a five-year term, with interest rates based on leverage ratios, ensuring alignment with the company's performance.

How much lumber and pulp does Mercer International produce annually?

Mercer has an annual production capacity of 2.2 million tonnes of pulp and 550 million board feet of lumber.

When was Mercer International's new credit facility announced?

The new credit facility was announced on January 21, 2022.