Worthington Steel, Inc. 8-K

What Happened
Worthington Steel, Inc. announced on June 25, 2026 that it entered into a new Credit Agreement providing an asset-based revolving credit facility (ABL Facility) with aggregate capacity up to $550,000,000, with Wells Fargo Bank, N.A. as agent. The facility refinances and replaces the company’s prior revolving credit agreement (dated November 30, 2023). The new ABL Facility matures on June 25, 2031 and is secured by substantially all assets of the company and its guarantors (subject to customary exceptions and an intercreditor agreement with other lenders).

Key Details

• Facility size: up to $550,000,000 ABL, with (a) an uncommitted accordion up to $200,000,000 (subject to conditions) and (b) a possible committed increase up to $650,000,000 prior to the Klöckner Increase Effective Date.
• Uses: to finance the Klöckner Acquisition Transactions, pay related fees, for working capital and general corporate purposes, and to reimburse letters of credit.
• Interest and fees: choice of base-rate pricing or term SOFR pricing; pricing spreads vary with availability (examples: base-rate option includes a margin of 0.250%–0.375%; SOFR option includes 1.250%–1.375%); customary fees and default margin increases (events of default may add 2.0%).
• Other mechanics: swingline loans up to 10% of the revolver, letters of credit up to $55,000,000 (or 10% of revolver after certain increases), secured by substantially all assets subject to an intercreditor agreement.
• Covenant trigger: if excess availability falls below the greater of 10% of the Line Cap or $41,000,000 (adjusted after certain increases), the company must maintain a consolidated fixed charge coverage ratio of at least 1.00x (tested quarterly on a trailing 12‑month basis) until availability recovers for 30 consecutive days.
• Termination of prior facility: upon execution of the new Credit Agreement the Former Credit Agreement (maturing Nov. 30, 2028) was terminated and its security interests released.

Why It Matters
This new ABL Facility provides Worthington Steel with committed asset-based liquidity to fund the Klöckner acquisition, support working capital and extend the company’s borrowing runway to 2031. For investors, the key positives are increased near-term liquidity and a longer maturity profile versus the prior facility. Important considerations: the facility is secured by substantially all assets (which affects collateral priorities), has availability-based pricing and a specific financial covenant (fixed charge coverage ratio) that can restrict flexibility if borrowing availability falls; defaults can raise borrowing costs.