ASX-listed James Hardie secures $3.5 billion credit to fund AZEK deal

Reuters

2 days ago

June 2 (Reuters) - ASX-listed James Hardie (JHX.AX), opens new tab said on Monday it had secured new senior credit facilities for a total of $3.5 billion with broad support, including 30 participating banks to support its operations and acquisition of U.S.-listed AZEK (AZEK.N), opens new tab.
The multi-billion dollar loan facility can be broken down into a $1 billion revolving credit facility and a $2.5 billion senior secured term loan A, split into two tranches.
The fibre-cement maker had offered to buy the U.S. artificial decking maker for $8.75 billion in March, while markets were concerned about a slowdown in the U.S. housing sector.
With the new credit facilities, bridge facility commitments with certain lenders in connection with the pending acquisition were reduced from $4.3 billion to $1.7 billion.
New housing stock in the U.S. is near a two-decade high and tariffs and an immigration crackdown under President Donald Trump are seen as likely to slow construction further.
In May, the building material firm forecast tepid earnings growth for its North American business, the company's biggest market and profit engine, while reporting a drop in annual profit.
Back in Australia, market scrutiny has also increased on such large corporate buyouts after investors raised questions about the AZEK deal.
In a separate announcement, James Hardie terminated its American depositary shares (ADS) program, believing it will become unnecessary after the company lists its share on the New York Stock Exchange.
James Hardie's ASX-listed shares jumped as much as 3.2% to A$36.57, their highest level in over a week, and were last trading up 2.9%. The stock has lost more than 8% in value since the buyout deal was announced in March.