UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported):

March 8, 2011

AGY HOLDING CORP.

(Exact name of registrant as specified in its charter)

(888) 434-0945

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

On March 8, 2011, AGY Holding Corp., a Delaware corporation (“AGY Holdings”), a wholly-owned subsidiary of KAGY Holding Company, Inc., a Delaware corporation (“KAGY Holding”), entered into an amended and restated loan and security agreement among AGY Holdings, AGY Aiken LLC, a Delaware limited liability company (“AGY Aiken”), AGY Huntingdon LLC, a Delaware limited liability company (“AGY Huntingdon” and together with AGY Holdings and AGY Aiken, each a “Borrower” and collectively the “Borrowers”), the lenders party thereto from time to time, Bank of America, N.A., a national banking association, as Administrative Agent (the “Agent”) and UBS Securities LLC, as Documentation Agent (the “Loan Agreement”). The Loan Agreement amended and restated the credit agreement, dated as of October 25, 2006, among the Borrowers, KAGY Holding, the subsidiary guarantors named therein, the Lenders named therein, UBS Securities LLC, as Documentation Agent, UBS Loan Finance LLC as Swingline Lender and UBS AG, Stamford Branch, as Issuing Bank, Administrative Agent and Collateral Agent.

A description of the material terms of the Loan Agreement follows. This description of the Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the Loan Agreement, which is filed with this Current Report as Exhibit 10.1.

Capitalized terms used in the description below without definition shall have the meanings specified in the Loan Agreement.

FACILITY

The Loan Agreement provides for an expanded line of credit of up to $50 million under a revolving credit facility (including a sublimit for letters of credit of $20 million and a swingline sublimit of $5 million), of which approximately $24.8 million was drawn on March 8, 2011 and $2.4 million letters of credit were outstanding. The term of the agreement ends on the earlier of (a) March 8, 2015 and (b) the date that is ninety (90) days prior to the maturity of the Second Lien Notes.

Funds drawn under the Loan Agreement will be used (a) to satisfy existing and future Debt, (b) to pay fees and transaction expenses associated with the closing of the credit facility, (c) to pay certain obligations in accordance with the Loan Agreement and (d) for working capital and other lawful corporate purposes of the Borrowers.

INTEREST RATES

The Loan Agreement provides for two pricing options for revolving loans: (i) revolving loans on which interest is payable on the first Business Day of each month at a base rate equal to the greater of (x) the rate of interest in effect for such day as publicly announced from time to time by Bank of America, N.A. as its prime rate, (y) the Federal Funds Rate for such day, plus 0.50%; or (z) LIBOR for a 30 day interest period as determined on such day, plus 1.0% and (ii) revolving loans on which interest accrues for one, two, three or six months (or if the Agent so agrees, nine or twelve months) at a rate of interest per annum equal to (x) the British Bankers Association LIBOR Rate or (y) if the British Bankers Association LIBOR Rate is not available, the interest rate at which dollar deposits in the approximate amount of the LIBOR loan would be offered by Bank of America’s London branch to major banks in the London interbank Eurodollar market. Each of the rates described above in (i)(x), (i)(y), (i)(z) and (ii)(x) and (ii)(y) will include in addition an applicable margin.

FEES

An unused line fee rate initially equal to 0.50% per annum and ranging from 0.375% per annum to 0.50% per annum, based upon a fixed charge coverage ratio based pricing grid, will be payable in arrears on the first day of each month with respect to the average daily unused portion of the revolving loan commitments.

Certain other facility fees may be payable to the Agent in amounts and at times as may be separately agreed upon in writing between AGY Holdings and the Agent.

SECURITY

The obligations of AGY Holdings under the Loan Agreement and other ancillary loan documents are secured by a first priority Lien on substantially all of the assets of AGY Holdings and each wholly-owned domestic subsidiary of AGY Holdings, including without limitation, a pledge of 100% of the capital stock of AGY Holdings held by KAGY Holdings and of each of AGY Holdings’ existing and future wholly-owned domestic subsidiaries that are corporations or certificated limited liability companies held by AGY Holdings and, up to a maximum of 65% of the voting stock of any first-tier foreign subsidiary.

GUARANTY

The obligations of AGY Holdings under the Loan Agreement and other ancillary loan documents are guaranteed by KAGY Holding.

NEGATIVE COVENANTS

The Loan Agreement contains covenants and provisions that restrict, among other things, the ability of AGY Holdings and its subsidiaries to: (i) create, incur or suffer to exist liens on any of its property or assets; (ii) make certain investments; (iii) incur certain indebtedness; (iv) engage in mergers, consolidations and sales of all or substantially all their assets; (v) make certain asset sales; (vi) make certain restricted payments; (vii) make fundamental changes to the nature of its business, accounting policies, or become a general partner in any partnership; (viii) engage in transactions with affiliates; (ix) enter into some sale-leaseback transactions and (x) enter into agreements restricting dividends and advances by their Subsidiaries, in each case subject to specified exceptions.

FINANCIAL COVENANTS

The Loan Agreement requires AGY Holdings and its subsidiaries on a consolidated basis, excluding the Grace Companies, to satisfy certain financial performance criteria. Specifically, if any revolving credit facility commitments are outstanding and after the occurrence of (a) a default or event of default or (b) excess availability being less than the greater of (i) $6,250,000 or (ii) 12.5% of the borrowing base as of the last day of the most recent fiscal month ended, AGY Holdings will maintain a fixed charge coverage ratio of at least 1.0 to 1.0 for each period of four fiscal quarters ended during, or on the last day of the fiscal quarter immediately before the events listed in (a) and (b) above.

PREPAYMENTS

The Loan Agreement provides that the loans may be prepaid without penalty, in whole or in part, at any time, subject to the notice provisions and minimum dollar amounts set forth in the Loan Agreement.

EVENTS OF DEFAULT

The Loan Agreement specifies certain customary events of default, including but not limited to failure to pay principal or interest or other amounts when due, breach of certain covenants or representations, cross-defaults to certain other agreements and indebtedness in excess of specified amounts, judgment defaults in excess of specified amounts, certain events of bankruptcy and insolvency, dissolution, certain ERISA-related defaults, a failure of any loan document supporting the credit facility to be in full force and effect, a change of control, and a failure of any security interest or lien purported to be created by any guaranty or security document to give the collateral agent a perfected first priority security interest in and lien on all of the collateral thereunder.

On March 8, 2011, AGY Holdings entered into the Loan Agreement. A brief description of the terms and conditions of the Loan Agreement is included in Item 1.01 of this Current Report, which description is incorporated into this item by reference.

(d) Exhibits:

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.