On March 13, 2012, USEC amended and restated its existing $310.0 million credit facility, scheduled to mature on May 31, 2012, to a $235.0 million credit facility that matures on May 31, 2013. The amended and restated credit facility includes a revolving credit facility of $150.0 million (including up to $75.0 million in letters of credit) and a term loan of $85.0 million. Under the amended and restated credit facility, commencing December 3, 2012, the aggregate revolving commitments and term loan principal will be reduced by $5.0 million per month through the expiration of the credit facility. As with the former facility, the credit facility is secured by the assets of USEC Inc. and its subsidiaries. Borrowings under the credit facility are subject to limitations based on established percentages of eligible accounts receivable and USEC-owned inventory pledged as collateral to the lenders.
Paducah Plant Update
We have recently been in discussions regarding a potential one-year extension of Paducah enrichment operations through a multi-party arrangement involving the participation of Energy Northwest, a West Coast power supplier, the Bonneville Power Administration (BPA), a federal agency within DOE, TVA and DOE. The proposed arrangement would involve the enrichment of depleted uranium tails currently owned by DOE to produce U.S. origin low enriched uranium (LEU). As part of this arrangement, we would enter into an amendment to our existing power contract with TVA to purchase the power needed to operate the Paducah plant through the term of this arrangement. We hope to finalize the agreements among the parties in the near term. However, we have no assurance that we will reach an agreement, and if we are not successful, we expect to be ramping down enrichment operations at Paducah in May.
Even if we are successful in a one-year extension of Paducah enrichment operations, we have no assurance that we will continue enrichment operations at Paducah beyond the one-year term of an agreement. Even if market demand improves in the next year, market demand and plant economics may not support continued enrichment operations. Although the plant continues to operate at a very high level of efficiency, the technology uses significant amounts of electric power and is not cost-competitive with gas centrifuge plants operated by our competitors. During 2012, USEC expects to engage in continuing discussions with DOE regarding the future of the Paducah plant and the transition of Paducah operations. Under our lease, DOE has the obligation for decontamination and decommissioning of the Paducah plant. If enrichment operations cannot be extended, we will be working with DOE to achieve an orderly termination of enrichment operations and phased de-lease of the facilities to minimize transition costs.
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