Bethlehem Steel Corp. said yesterday that it had signed an agreement that provides it with $500 million in revolving credit. The new line of credit replaces two others.
The credit line is with a group of 19 U.S. and international banks, including Maryland National Bank and First National Bank of Maryland, according to Bethlehem spokesman Art Roth. Bethlehem did not specify the commitment of each bank.
Morgan Guaranty Trust Co. is the agent for the line of credit, with Chemical Bank and Long-Term Credit Bank of Japan Ltd., as co-lead managers. The line will initially be for $400 million, but there are commitments to expand it to $500 million if necessary, Mr. Roth said.
The rate on the new credit line, which is higher than on the old lines, is based on a formula of domestic and international indexes, he said. The accord comes after Bethlehem raised $172 million in a stock offering of 13.8 million shares in August.
"This credit facility, along with the common stock issue that we completed in August of this year, are key components in our comprehensive plan for helping to ensure that Bethlehem has the financial flexibility and resources for returning to sustained profitability," said Gary L. Millenbruch, executive vice president and chief financial officer of Bethlehem.
Despite its losses in the past three years, Bethlehem has been able to maintain a healthy cash flow, and the granting of the new line of credit did not come as a surprise.
"The banks have supported Bethlehem in the past, and there was no reason they would not support them in the future, particularly since they are making substantial progress," said Charles Bradford, vice president of UBS Securities Inc., an institutional investment brokerage.
In the first nine months of 1992, Bethlehem lost $180 million, or $2.50 a share.
Bethlehem has a current debt of $190 million on the two lines, Mr. Roth said.