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VSE enters into $300 million of amended and restated credit facilities
By Angela McDaniels
Tacoma, Wash., Feb. 2 – VSE Corp. entered into an amended and restated business loan and security agreement on Wednesday that provides for a $150 million term loan and a $150 million revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.
The maturity date is Jan. 28, 2020 for both the term loan and the revolver.
The initial interest rate is Libor plus 225 basis points. The margin over Libor depends on the company’s leverage.
The term loan requires principal payments over a five-year period that are greater in the later years than in the earlier years.
The revolver includes a $20 million sublimit for letters of credit.
The loan agreement includes a $75 million accordion feature that can be used to increase the term loan, the revolver or both.
The company must hedge the rate of interest on 50% of the outstanding amount of the term loan during the first three years.
Citizens Bank of Pennsylvania is the administrative agent. SunTrust Bank is the syndication agent. Capital One, NA, M&T Bank and PNC Bank, NA are the documentation agents. Citizens Bank, NA is the bookrunner and sole lead arranger.
VSE said it entered into the loan agreement to refinance the outstanding debt under its prior loan agreement, to finance the acquisition of four business units from Killick Aerospace Group and to have a working capital facility for letters of credit, capital expenditures and general corporate purposes.
As of the close of business on Thursday, the term loan was fully drawn and the company had $100 million outstanding under the revolver.
The loan agreement is secured by substantially all of the assets of the borrowers and contains covenants that include a total funded debt to EBITDA ratio and fixed charge coverage ratio.
Alexandria, Va.-based VSE provides vehicle fleet and equipment sustainment services, technical services and consulting services to the U.S. Government, various federal civilian agencies and other clients.
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