Cleveland-based LTV Steel Products, a subsidiary of steel manufacturer The LTV Corp., recently announced that it has raised the commitment level of it's triple-B-rated inventory securitization from $250 million to $302 million - a $55 million increase.

This ramping up of its asset-backed business comes along with an $80 million increase in liquidity that will allow the company to provide additional financial flexibility for its growing family of steel and steel-related businesses. The company does other types of financing and has been active in the asset-backed market for several years.

"We added two banks to a group of lenders and essentially that's really the change that took place there," said a source with the company. "The two banks increased the size of our commitment."

The source explained how this process works.

"They are credit facilities and they are secured by the inventory," he said. "We can draw from those facilities a certain amount based on the value of the inventory that we have. This has been in place for some time - we're just announcing an increase in them."

Although the company now has an increase in liquidity and a higher commitment level, the source also added that it does not mean that it will be increasing the amount of its issuance.

"It's inventory-based securitization and previously we had not utilized the full value of the inventory," said the source.

In addition, LTV Sales Finance Co., another LTV subsidiary, has increased the size of its triple-A-rated accounts receivables-based securitization business from $320 million to $345 million.

"We recently acquired two companies in the fourth quarter of last year and we included their accounts receivables in that," the source said. "This will include steel as well as the products of these two new companies, who manufacture steel tubing."

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