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

James Hardie, listed on the ASX, announced Monday that it had obtained new senior credit facilities totaling $3.5 billion from a wide range of banks. This will support its operations as well as AZEK's acquisition in the United States.

The multi-billion loan facility is divided into a revolving loan of $1 billion and a senior secured term loan (A) of $2.5 billion, which are split into two tranches.

In March, the fibre-cement manufacturer offered to purchase the U.S. artificial flooring maker for $8.75billion. At the time, markets were worried about a slowdown of the U.S. residential sector.

The new credit facilities have reduced the commitments to bridge facilities with certain lenders for the pending acquisition from $4.3 billion down to $1.7 billion.

The U.S. housing stock is at a record high. A crackdown on immigration under President Donald Trump and tariffs are expected to further slow down construction.

The building materials firm reported a decline in profit for the year, despite forecasting tepid growth of earnings. North America is the biggest market and profit generator.

Investors raised concerns about the AZEK transaction in Australia.

James Hardie announced that it had terminated the American Depositary Shares (ADS) Program, believing the program would be rendered unnecessary once the company listed its shares on the New York Stock Exchange.

James Hardie ASX listed shares rose as much as 3.2%, to A$36.57. This was their highest level for over a week. They were trading at a 2.9% gain last time. Since the announcement of the March buyout, shares have lost over 8%.

(source: Reuters)