Tree Island Renews $40M Wells Fargo Credit Facility

Tree Island Steel renewed its senior banking facility with Wells Fargo, the company said Thursday. The new deal includes a $30 million revolving credit line and $10 million in term debt, both available in Canadian or U.S. dollars. Interest on the facility floats with Canadian and U.S. benchmark interbank rates. Wells Fargo Capital Finance Corporation Canada remains the lender.

The facility is secured by a first charge on Tree Island's assets and comes with guarantees and pledges. The company must meet certain covenants, though the release did not specify the thresholds.

"We value Wells Fargo's longstanding partnership and appreciate their continued support in helping address our evolving financial requirements," said Nancy Davies, Tree Island's chief operating officer.

Tree Island, based in Richmond, British Columbia, and operating since 1964, makes wire products for industrial, residential, commercial, and agricultural use. Its lineup includes galvanized wire, fasteners, stucco reinforcing mesh, concrete reinforcing mesh, fencing, and other fabricated wire products sold under brands like Tree Island, Halsteel, and K-Lath.

The renewed facility gives the company liquidity through the next cycle. With steel prices and construction demand swinging, the variable-rate structure means Tree Island's financing costs will track short-term rate moves. Wells Fargo, carrying an Alpha Score of 63 from AlphaScala, rates as Moderate in the Financials sector.

Tree Island shares trade on the TSX under TSL.