Simpson Manufacturing gets $900 million restated revolving, term loans

By Marisa Wong

Los Angeles, April 4 – Simpson Manufacturing Co., Inc. entered into an amended and restated credit agreement on March 30 with Wells Fargo Bank, NA as administrative agent for a $450 million five-year revolving credit facility and a $450 million five-year term loan facility, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement amends and restates Simpson’s credit agreement dated July 27, 2012 with Wells Fargo as administrative agent.

The company has the ability to increase the principal amount of the restated credit facilities by an additional amount equal to the greater of $300 million and 100% of consolidated EBITDA for the most recently ended fiscal quarter.

The revolver includes a letter-of-credit sub-facility of up to $50 million.

The company is required to pay an annual facility fee of 10 basis points to 25 bps on the available commitments under the revolver, regardless of usage, with the applicable fee determined on a quarterly basis based on the company’s net leverage ratio.

Borrowings will bear interest at a reference rate plus an applicable margin also based on the company’s net leverage ratio.

Term loans will bear interest at an applicable margin ranging from 75 bps to 175 bps over adjusted Euribor, Tibor or Hibor (or some other Eurocurrency rate); spread adjusted daily simple SOFR; or spread adjusted term SOFR.

Revolver borrowings bear interest at daily simple RFR (Sonia or Saron) plus an applicable margin ranging from 68.26 bps to 153.26 bps for sterling-denominated borrowings or an applicable margin ranging from 65 bps to 150 bps for non-sterling denominated loans.

The amended credit agreement requires the company to comply with two financial maintenance covenants, each calculated on a consolidated basis. The company has to maintain a maximum consolidated net leverage ratio of not greater than 3.25x as of the last day of each fiscal quarter, subject to a step-up, at the company’s election, to 3.75x for four consecutive fiscal quarters following an acquisition above a specified threshold. The company has to maintain a minimum consolidated interest coverage ratio of not less than 2.5x as of the last day of each fiscal quarter.

Borrowings in the amount of $250,037,500 under the revolver and $450 million under the term loan will be used to finance a portion of the purchase price of the company’s previously announced acquisition of the Etanco Group.

Wells Fargo Securities, LLC is left lead arranger and left bookrunner for the restated credit agreement. MUFG Union Bank, NA is joint lead arranger, joint bookrunner and syndication agent.

Simpson is a Pleasanton, Calif.-based engineering firm and building materials producer.

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