Resolute Completes Amendment and Extension of Its ABL Credit Facility

Rhea-AI Summary

On December 15, 2021, Resolute Forest Products (NYSE: RFP) announced the extension of its senior secured asset-based revolving credit facility for an additional five years. The facility, totaling $450 million, remains undrawn except for $73 million in letters of credit. This extension includes an ESG module aimed at enhancing sustainability initiatives. Company executives highlighted the credit facility's role in supporting growth and transformation goals while securing long-term liquidity under favorable market conditions.

Positive

• Extension of ABL credit facility until December 2026 improves financial flexibility.
• Undrawn credit facility suggests a strong liquidity position for future investments.
• Inclusion of ESG module aligns with sustainable practices, potentially enhancing shareholder value.

Negative

• None.

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MONTRÉAL, Dec. 15, 2021 /PRNewswire/ - Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) today announced a reset of the five-year maturity of its senior secured asset-based revolving credit facility ("ABL credit facility") with an aggregate lender commitment of up to $450 million at any time outstanding, subject to borrowing base availability based on specified advance rates, eligibility criteria and customary reserves. The facility also includes an Environmental, Social and Governance ("ESG") module with targets to be agreed upon with the bank syndicate, which upon activation will impact ABL pricing.

"This successful extension improves certain terms and conditions and supports the execution of our growth and transformation initiatives for the future. Our new ESG module also demonstrates our commitment to delivering value for our shareholders while driving economic activity in a sustainable and responsible way," said Remi G. Lalonde, president and chief executive officer. "By renewing and extending the ABL through December 2026, we are taking advantage of our strong financial position and of attractive bank market conditions to lock in a competitive source of liquidity for the long term," added Sylvain A. Girard, senior vice president and chief financial officer.

The ABL facility is completely undrawn, with the exception of approximately $73 million of ordinary course letters of credit outstanding. The extension of the ABL credit facility includes a number of modifications, including a LIBOR transition. The $450 million facility includes a $250 million tranche available to Resolute's U.S. borrowers and its Canadian borrowers, as well as a $200 million tranche available only to its U.S. borrowers, in each case subject to the borrowing base availability of those borrowers. The facility includes a $60 million swing line sub-facility and a $200 million letter of credit sub-facility. The credit agreement also provides for an uncommitted ability to increase the revolving credit facility by up to $500 million, subject to certain terms and conditions.

The credit agreement for the ABL facility contains customary covenants, representations and warranties, and events of default for asset-based credit agreements of this type. The company's obligations under the facility are guaranteed by certain material subsidiaries, and they are secured by first priority liens on accounts receivable, inventory and related assets.

The ABL credit facility is provided by a syndicate of six banks, with Bank of America as administrative agent and collateral agent. Bank of America, Wells Fargo and Bank of Montreal acted as joint lead arrangers and joint book runners; CIBC and TD acted as co-documentation agents.

Troutman Pepper Hamilton Sanders LLP and McCarthy Tétrault LLP represented Resolute.

Cautionary Statements Regarding Forward-Looking Information

Statements in this press release that are not reported financial results or other historical information of Resolute Forest Products Inc. (with its subsidiaries, "we," "our," "us" or the "company") are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements relating to the expected support of the ABL credit facility for the execution of our growth and transformation initiatives for the future. Forward-looking statements may be identified by the use of forward-looking terminology such as the words "should," "would," "could," "will," "may," "expect," "believe," "see," "anticipate," "continue," "generate," "delivering," "support," "improve," "driving" and other terms with similar meaning indicating possible future events or potential impact on our business or our shareholders.

The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. These statements are based on management's current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially. Additional information regarding factors that may cause actual results to differ materially from these forward-looking statements are set forth under Part I, Item 1A, "Risk Factors," of our annual report on Form 10-K for the year ended December 31, 2020, filed with the U.S. Securities and Exchange Commission (or, the "SEC") on March 1, 2021, which have been heightened by the COVID-19 pandemic, including related governmental responses and economic impacts, market disruptions and resulting changes in consumer habits.

All forward-looking statements in this press release are expressly qualified by the cautionary statements contained or referred to above and in the company's other filings with the SEC and the Canadian securities regulatory authorities. The company disclaims any obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

About Resolute Forest Products

Resolute Forest Products is a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products and papers, which are marketed in over 50 countries. The company owns or operates some 40 facilities, as well as power generation assets, in the United States and Canada. Resolute has third-party certified 100% of its managed woodlands to internationally recognized sustainable forest management standards. The shares of Resolute Forest Products trade under the stock symbol RFP on both the New York Stock Exchange and the Toronto Stock Exchange.

Resolute has received regional, North American and global recognition for its leadership in corporate social responsibility and sustainable development, as well as for its business practices. Visit www.resolutefp.com for more information.

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SOURCE Resolute Forest Products Inc.

FAQ

What is the significance of Resolute Forest Products' ABL credit facility extension dated December 15, 2021?

The extension allows Resolute Forest Products to secure $450 million in credit until December 2026, improving liquidity and supporting growth initiatives.

How much of the ABL credit facility is currently drawn?

As of the announcement, only approximately $73 million is drawn in ordinary course letters of credit.

What role does the ESG module play in the ABL credit facility for Resolute Forest Products?

The ESG module incorporates sustainability targets aimed at aligning the company's operations with responsible economic practices, potentially impacting the loan pricing.

Which banks are involved in the ABL credit facility for Resolute Forest Products?

The facility is provided by a syndicate of six banks, led by Bank of America, alongside Wells Fargo and Bank of Montreal.