Omega Protein gets new credit facility

Omega Protein on Friday announced it has entered into a USD 35 million senior secure credit facility with Wells Fargo Bank.

The new credit facility consists of a three-year revolving credit facility of up to USD 35 million, including a USD 7.5 million sub-limit for the issuance of standby letters of credit and is secured by substantially all Omega's assets, with the exception of those already pledged in connection with existing federal Fisheries Finance Program loans.

This replaces the company's existing credit facility with a syndicate of banks under which USD 11.4 million was outstanding under a term loan and USD 2.8 million was outstanding under letters of credit. Omega prepaid the term debt at closing and the letters of credit were transferred to Wells Fargo.

In connection with the early termination, Omega expects to incur an approximate USD 400,000 charge in the fourth quarter of 2009 for the write-off of a loan origination and related feeds. Additionally, the termination renders the associated interest rate swaps to be in ineffective, which results in about USD 1.4 million to be recognized as an interest expense in the third quarter of this year.

Omega Protein is a leading manufacturer of omega-3 fatty acid fish oils, as well as specialty fish meals and fish oils used as value-added ingredients in aquaculture and other livestock feeds.

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