U.S.-based graphite electrode producer GrafTech International Ltd. continues to sign additional long-term contracts at favorable prices well above the 10-year historical average price for graphite electrodes of roughly $4,500 per metric tonne (mt). At the same time, the company is issuing a new $1.5 billion senior secured term loan due 2025 and a new $250 million revolving credit facility due 2023 (unrated). We expect the company to use the proceeds from the new term loan to finance a $1.1 billion dividend to its financial sponsor (Brookfield Asset Management) and refinance its existing capital structure, including its $300 million senior unsecured notes due 2020. We are raising our corporate credit rating on GrafTech to 'B+' from 'B'. The outlook is stable.
