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SOC 2 Type II & ISO 27001100% audit trailProven in US banking & private credit

Meridian Steel Corp. · Spreads

Expert Verified

Profit & Loss

StandaloneConsolidated

Millions USD

Updated Search rows

#	Particulars	#FY2023Audited	#FY2024Audited	#FY2025Audited · Annual
Income
1	Revenue from Operations	387.1	▲8.9%421.5	▲11.1%468.2
2	TMT Bars & Rods	213.0	232.0	258.0
3	Structural Steel (angles/channels/beams)	92.0	100.0	112.0
4	Billets & Semi-finished	58.0	63.0	70.0
5	Wire Rods & Others	24.1	26.5	28.2
6	Other Income	4.6	▲13.0%5.2	▲11.5%5.8
7	Total Incomeƒ	391.7	▲8.9%426.7	▲11.1%474.0
Expenses
8	Cost of Materials Consumed	250.0	▲8.0%270.0	▲11.1%300.0
9	Changes in Inventories	−2.0	▼25.0%−2.5	▼20.0%−3.0
10	Employee Benefits Expense	24.0	▲10.4%26.5	▲9.4%29.0
11	Power & Fuel	34.0	▲10.3%37.5	▲14.7%43.0
12	Other Expenses	33.4	▲9.3%36.5	▲8.5%39.6
13	Total Operating Expensesƒ	339.4	▲8.4%368.0	▲11.0%408.6
14	EBITDAƒ	52.3	▲12.2%58.7	▲11.4%65.4
15	Depreciation & Amortisation	12.0	▲8.3%13.0	▲7.7%14.0
16	EBITƒ	40.3	▲13.4%45.7	▲12.5%51.4
17	Finance Costs	16.3	▲2.5%16.7	▲1.8%17.0
18	Profit Before Taxƒ	24.0	▲20.8%29.0	▲18.6%34.4
19	Tax Expense	6.0	▲20.0%7.2	▲19.4%8.6
20	Profit After Taxƒ	18.0	▲21.1%21.8	▲18.3%25.8

20 rows

Extracted from source DerivedCompactCozy

Meridian Steel Corp. · Credit Memo

Committee-ready

Credit MemoMeridian Steel Corp.View mode

Checklist 2

Credit Memo · Committee July 2026

Meridian Steel Corp.

$45.0M Senior Secured Term Loan · Phase II Capacity Expansion · 6 years · 12-mo interest-only · 3 tranches

Section summaryDeal snapshotStrength

APPROVE with covenants: $45.0M senior secured term loan, secured 1.31x, base-case DSCR never below 1.47x.

Obligor grade

BBB-

Facility grade

BBB

Min DSCR

1.47x

RAROC

18.9%

Pricing

SOFR ~9.25%

Grounded inSpreads[1], projections[2], internal rating[3], risk monitor and diligence[4]

1. Recommendation & Credit View

AI recommendationApprove with covenantsStrength

Approve the $45.0M senior secured term loan with the covenant package and conditions below.

This memorandum recommends approval of a $45.0M Senior Secured Term Loan for Meridian Steel Corp. to fund a Phase II capacity expansion, upgrading the rolling mill from 120,000 to 165,000 tons per year. The facility is a 6-year term loan with a 12-month interest-only period, drawn in three milestone-linked tranches. Project cost is $62.0M against a sponsor equity contribution of $17.0M (27.4%).[1]

Meridian is a mid-market integrated steel manufacturer in Pittsburgh, Pennsylvania, with 9 consecutive profitable years. FY25 revenue was $468.2M (+11.1% YoY), EBITDA $65.4M at a 14.0% margin, and PAT $25.8M. Debt/Equity improved from 1.46x to 1.14x, DSCR is 1.62x, and interest coverage is 3.85x, all comfortably inside policy.[2]

The internal grade is BBB- (score 72/100); the senior secured position lifts the facility one notch to BBB. Base-case DSCR troughs at 1.47x in FY27E during the capex ramp and rebuilds to 2.75x by FY32E; net leverage clears 1.0x by FY31E. RAROC of 18.9% clears the 15% hurdle. Recommendation: approve, subject to the covenant package and conditions below.[3]

AI inference

Meridian is a nine-year profitable integrated steel producer with improving leverage and coverage into the facility period. The $45M expansion is 27% sponsor-funded, milestone-tranched, and secured 1.31x. Base-case DSCR troughs at 1.47x with comfortable covenant headroom; even the downside case holds above the 1.25x floor.

2. Facility Structure & Sources / Uses

The $45.0M senior secured term loan disburses in three milestone-linked tranches, each released on independent-engineer sign-off:

Tranche	Amount $ M	Drawdown	Use of proceeds
Tranche 1	18.0	On close	Rolling-mill civil & structural works
Tranche 2	17.0	Milestone 1 · month 6	Mill equipment & automation
Tranche 3	10.0	Milestone 2 · month 12	Balancing plant & commissioning
Total facility	45.0	20 quarterly instalments after the 12-mo interest-only period

Sources of funds

Source	$ M	%
Senior Secured Term Loan	45.0	72.6%
Sponsor equity	17.0	27.4%
Project cost	62.0	100%

Uses of funds

Use	$ M
Rolling mill & primary equipment	48.0
Balance-of-plant & utilities	8.0
Margin for working capital	4.0
Contingency	2.0
Total project cost	62.0

Uses are capex-weighted: 90% funds the rolling mill and balance-of-plant, with $4M of working-capital margin and $2M contingency. No proceeds refinance existing debt, so the facility is genuinely growth capital.

3. Borrower & Group

Installed capacity

120,000 → 165,000 tons/yr

Products

TMT · structural · wire rod

Sponsor holding

74% (nil pledge)

Plant

Pittsburgh, Pennsylvania

Sales mix

90% domestic / 10% export

End-markets

EPC · auto · govt · dealer

Track record

9 profitable years

Management

New CFO Jan 2026; board stable

4. Industry & Positioning

Producer	Revenue	EBITDA margin	Net Debt/EBITDA	D/E	RoCE	Grade
Meridian Steel	468	14.0%	3.51x	1.14x	10.5%	BBB-
Allegheny Bar & Rod	620	13.2%	3.9x	1.35x	9.2%	BB+
Keystone Ispat	410	15.1%	2.8x	0.95x	12.1%	BBB
Monongahela Structurals	540	12.4%	4.4x	1.60x	8.0%	BB
Laurel TMT & Power	355	14.6%	3.2x	1.05x	11.4%	BBB-

AI inference

Meridian sits mid-pack on scale and in line with the comparable median on EBITDA margin and RoCE, with mid-range leverage. The flat-realisation base case excludes any steel-price upside, so projected deleveraging is volume- and efficiency-driven, not cycle-dependent.

5. Revenue & Volume Analysis

Volume-led growth

Revenue is driven by a capacity ramp (120k → 165k TPA, utilization 75% → 92%) and an improved product mix (TMT/rebar 55%, structural 30%, wire rod 15%), not price, realization is held flat in the base case.

Backward-integrated EAF model

An Electric Arc Furnace route with in-house scrap processing provides a ~$15-18/ton cost advantage over standalone re-rollers.

Infrastructure exposure

~40% of revenue is under long-term contracts with EPC contractors; the $1.2T federal Infrastructure Investment and Jobs Act underpins multi-year demand.

Cash flow generation

Positive operating cash flow for 5 straight years; FY25 CFO $58.0M covers interest 3.4x.

6. Financial Performance

Summary points

Revenue grew 11.1% YoY; ~14% volume growth offset by a ~3% realization decline.
D/E improved to 1.14x vs the 2.0x covenant; DSCR of 1.62x gives 30% headroom above the 1.25x floor.

Open items

Validate whether the FY25 margin uptick is structural or driven by one-time cost deferrals.

Clarify with company

Confirm FY26 guidance; management indicated $520M but no formal projection has been shared.

AI inference

Revenue compounded ~10% to $468M with EBITDA margin steady at 14.0%; net leverage fell from 4.76x to 3.51x and DSCR strengthened to 1.62x. The working-capital cycle is tightening (CCC 152 → 137 days). Every trend runs favourably into the facility.

7. Ratio Analysis

Leverage improving

D/E 1.46 → 1.14x · Net Debt/EBITDA 4.76 → 3.51x

Coverage comfortable

Interest coverage 3.85x · DSCR 1.62x, ~30% headroom

Liquidity softening

Current ratio 2.12 → 1.76x · cash cover 0.21x

Profitability

Ratio	FY23	FY24	FY25
EBITDA Margin	13.5%	13.9%	14.0%
PAT Margin	4.7%	5.2%	5.5%
Return on Equity	9.7%	10.6%	11.3%
Return on Capital Employed	8.8%	9.6%	10.5%

Leverage & Solvency

Ratio	FY23	FY24	FY25
Debt / Equity	1.46x	1.31x	1.14x
Total Debt / EBITDA	5.22x	4.57x	4.00x
Net Debt / EBITDA	4.76x	4.10x	3.51x
TOL / TNW	1.81x	1.66x	1.50x

Coverage & Debt Service

Ratio	FY23	FY24	FY25
Interest Coverage	3.21x	3.52x	3.85x
EBIT / Interest	2.47x	2.74x	3.02x
DSCR	1.38x	1.51x	1.62x
CFO / Total Debt	18%	19%	22%

Liquidity & Working Capital

Ratio	FY23	FY24	FY25
Current Ratio	2.12x	1.91x	1.76x
Quick Ratio	1.42x	1.25x	1.14x
Debtor Days (DSO)	92	91	88
Cash Conversion Cycle	152	145	137

8. Working Capital & Borrowing Base

Borrowing-base assessment · $ M

Inventory (paid stock)	95.8
Less: sundry creditors	(56.0)
Paid stock	39.8
Less: margin @ 25%	(9.9)
Eligible paid stock	29.9
Book debts < 90 days	92.0
Less: margin @ 40%	(36.8)
Eligible book debts	55.2
Borrowing base	85.1
Revolver limit	75.0
Current utilisation (80%)	60.0

9. Debt Profile & Repayment

Facility	Type	Committed	Outstanding	Rate	Maturity
Syndicated Term Loan	Term	230.0	178.0	SOFR+2.75%	Mar 2031
Equipment Finance	Term	18.0	12.0	SOFR+3.25%	Mar 2028
Revolver / ABL	Working capital	75.0	60.0	SOFR+3.00%	Annual renewal
Trade Finance (LC-backed)	Trade finance	20.0	11.8	SOFR+2.40%	≤ 180 days
Existing debt		343.0	261.8	~9.3% all-in
Proposed, Phase II Term Loan	Term	45.0	-	SOFR+2.75%	Mar 2032

Repayment & debt-service schedule · $ M

FY	Principal	Interest	Total service
FY26E	16	15	31
FY27E	25	17	42
FY28E	24	16	40
FY29E	22	14	36
FY30E	20	12	32
FY31E	16	10	26
FY32E	10	8	18

Debt service peaks at $25M principal in FY27E, covered 1.47x; the new facility begins amortising after the moratorium.

10. Projections & Assumptions

Particulars ($ M / ratio)	FY25A	FY26E	FY27E	FY28E	FY29E	FY30E	FY31E	FY32E
Revenue	468.2	520	614	702	770	790	790	790
EBITDA	65.4	73.3	87.2	101.1	112.4	116.9	116.9	118.5
EBITDA margin	14.0%	14.1%	14.2%	14.4%	14.6%	14.8%	14.8%	15.0%
Profit After Tax	25.8	29.5	36.1	45.8	55.0	59.9	61.4	64.9
Net Debt / EBITDA	3.51x	3.34x	2.87x	2.25x	1.71x	1.28x	0.90x	0.46x
DSCR	1.62x	1.55x	1.47x	1.63x	1.88x	2.14x	2.42x	2.75x

DSCR troughs at 1.47x in FY27E during the capex ramp, rebuilding to 2.75x by FY32E; net leverage clears 1.0x by FY31E. Realisation is held flat, so the deleveraging is volume-led.

11. Sensitivity & Scenario Analysis

Scenario	Revenue	EBITDA	Min DSCR	Peak Leverage	Covenant
Base	as modelled	as modelled	1.47x	3.34x	Comply
Downside · margin −150 bps, ramp +1 yr	−8%	−15%	1.28x	4.02x	Thin (holds)
Severe · price −8%, volume −12%, +200 bps	−20%	−25%	1.08x	5.10x	Breach → cure

Break-even to the 1.25x floor

EBITDA margin floor 11.8% (base 14.0%) before FY27E DSCR = 1.25x

Volume floor 108,000 tons (base 118,000)

Realization floor ~$665/ton (base ~$700/ton)

DSCR sensitivity

FY27E · realisation $/t × utilisation %

$/t ↓ · util % →	72%	80%	88%	95%
$645	1.28x	1.42x	1.56x	1.68x
$675	1.37x	1.52x	1.67x	1.80x
$700	1.47x	1.63x	1.79x	1.93x
$730	1.57x	1.74x	1.91x	2.06x
$755	1.67x	1.85x	2.03x	2.19x

AI inference

Base-case min DSCR is 1.47x; the downside (margin −150 bps, ramp +1 yr) holds at 1.28x, and only the severe case (price −8%, volume −12%) dips to 1.08x with a defined cure. Covenant headroom is adequate through the cycle.

12. Internal Rating & Scorecard

Internal BBB- obligor / BBB facility · PD 1.80% · LGD 35% · expected loss 0.63% · obligor score 72 / 100.

Factor	Band	Score / 100	Weight
Coverage	Interest coverage 3.85x	82	28%
Leverage	D/E 1.14x, improving	78	24%
Profitability	EBITDA margin 14.0%	75	20%
Business Risk	Top-3 customers 41%	74	16%
Liquidity	Current ratio 1.76x	70	12%

13. Risk Assessment & Mitigants

Risk	Likelihood	Impact	Mitigant	Residual
Steel-price cyclicality	Med-High	High	Flat-price base case; input pass-through; DSCR covenant	Medium
Leverage elevated through capex	Medium	Medium	Amortizing structure; step-down covenant; 27% sponsor equity	Low-Med
Customer concentration (top-3 41%)	Medium	Medium	Diversifying across 6 end-markets; LC-backed export; reporting covenant	Medium
Phase II execution & ramp-up	Medium	Medium	9-yr sponsor track; milestone-linked tranches; independent feasibility study	Low-Med
Working-capital stretch	Low-Med	Medium	Borrowing-base-linked revolver; aging improving (DSO 92→88)	Low
Environmental / regulatory	Medium	Medium	Permits current; controls embedded in capex	Low
Sponsor / governance	Low	High	74% holding, no pledge, clean bureau, stable board	Low

14. Data Triangulation

Figure	Sources	Status
Revenue $468.2M	Audited · Tax Return · Sales Tax	✓ Consistent (3 sources)
EBITDA $65.4M	Audited · Bank	✓ Consistent
Total Debt $261.8M	Audited · Bank	✓ Consistent
Inventory $95.8M	Audited · Borrowing Base	✓ Consistent (within 2%)
Cash & Bank	Audited $32.4M · Bank $30.1M	⚠ 7% variance, Review

5 figures · 4 sources · 4 consistent · 1 to review; the cash-balance variance is a condition precedent.

15. Security & Covenants

Security package

First lien (pari-passu) on Phase II and existing plant & equipment (net block $245M).
Mortgage on factory land & building, Pittsburgh; appraiser-assessed realizable value $308M.
Secured term debt (existing + new) $235M → security cover 1.31x.
Sponsor personal guarantee (independently assessed net worth $95M).

Covenant package

Covenant	Threshold	Current	Trough	Status
DSCR	≥ 1.25x	1.62x	1.47x (FY27E)	Comply
Total Debt / EBITDA	≤ 4.25x → 3.0x	4.00x	3.89x (FY26E)	Comply
Interest Coverage	≥ 2.50x	3.85x	3.86x (FY26E)	Comply
TOL / TNW	≤ 2.00x	1.50x	~1.45x	Comply
Promoter Holding	≥ 51%	74%	74%	Comply
Security Cover	≥ 1.25x	1.31x	1.31x	Comply

16. Legal, Compliance & Diligence

Litigation: No active bankruptcy or litigation (company or sponsor); 1 resolved matter FY23
Regulatory / Bureau: Not on default / suit-filed lists; no adverse media (12-month scan)
Management: New CFO appointed Jan 2026 (informational); board and sponsors stable
Environmental: operating consents current; Phase-II capex includes emission-control equipment.
Banking conduct satisfactory across all facilities.

17. Pricing, Returns & Conditions

Pricing & returns

Coupon	SOFR-linked ~9.25% all-in
Cost of funds	~6.90%
Net interest margin	~2.35%
Origination fee	0.75% ($0.34M)
Expected-loss charge	0.63% ($0.28M)
Economic capital	~$5.4M
RAROC	18.9% (hurdle 15%)

Conditions precedent

Reconcile the $2.3M cash-balance variance before first drawdown.
Receive outstanding property & casualty insurance; note lender as loss-payee.
Perfect first lien on Phase II assets; file UCC within 30 days of drawdown.
Independent lender's-engineer sign-off before each tranche release.

Conditions subsequent

Maintain DSCR ≥ 1.25x and the leverage step-down, tested quarterly on certified financials.
Report if top-3 customer concentration exceeds 45% of revenue.
Sponsor holding not below 51%; no fresh pledge without lender consent.
Route proportionate sales through the syndicate; maintain borrowing-base discipline.

APPROVE with covenants

$45.0M senior secured term loan, priced SOFR-linked ~9.25% all-in, RAROC 18.9% against a 15% hurdle, secured 1.31x with a quarterly-tested covenant package and the conditions precedent above.

Recommended: RM · Concurred: Credit · Approved: CRO

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Frequently asked questions

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What loan types does Vishwa AI support?

Vishwa AI underwrites commercial real estate (multifamily, office, retail, industrial, hospitality, self storage, and mixed use), construction and bridge loans, C&I term loans and lines of credit, SBA 7(a) and 504 loans, asset-based loans, equipment finance, agricultural loans, and private credit. The platform adapts to each loan type's documents, metrics, and credit policy.

Is AI underwriting auditable and explainable?

Yes. Every figure links to the source document and the calculation behind it, so when an examiner, an auditor, or an LP asks how you got a number, you can show them in one click. Vishwa AI applies the same logic to every deal and keeps a complete audit trail, which is usually the part manual spreading cannot reproduce six months later.

How accurate is the extraction, and is there human review?

AI extracts, our experts verify, and your analysts review the exceptions. In practice that turns a multi-day spreading exercise into a quick validation, with people focused on the cases that need judgment rather than re-keying a T-12 into Excel.

Bring a file from any loan type

Show us a live credit file. We will spread it, compute the numbers your policy uses, and draft the credit memo, with every figure traced to its source.