Emcor enters into credit agreement for $1.6 billion five-year loan

By Rebecca Melvin

New York, March 3 – Emcor Group Inc. and wholly owned subsidiary Emcor Group (UK) plc have entered into a sixth amended and restated credit agreement that provides incremental liquidity as well as extends the companies’ debt maturities, according to an 8-K filing with the Securities and Exchange Commission.

The five-year credit facility is comprised of a $1.3 billion revolving credit facility and a $300 million term loan, and amends and restates the company’s previous $1.3 billion credit agreement.

The syndicate of lenders is led by Bank of Montreal as agent and BMO Capital Markets Corp., Bank of America NA, JPMorgan Chase Bank NA, U.S. Bank NA and Citizens Bank NA as joint lead arrangers and joint bookrunners.

Emcor UK may borrow a portion of the revolver directly from lenders.

Maximum borrowings under the revolver may be increased by up to an additional $600 million.

The credit agreement was inked March 2.

Borrowings bear interest at Libor plus 100 basis points to 175 bps, depending on the company’s leverage ratio. The interest rate at closing was 2.58%.

The company is using proceeds from the term loan to refinance existing debt, pay transaction fees and fund other general corporate purposes.

Mark Pompa, executive vice president and chief financial officer of Emcor, commented in a press release, “We are pleased to announce the completion of our amended and restated credit agreement which provides incremental liquidity as well as extends our debt maturities.

“Most importantly, it provides us with enhanced flexibility to pursue all strategic growth opportunities.”

The company simultaneously authorized an additional $200 million for the purchase of shares of its outstanding common stock under its share repurchase program.

Emcor is a Norwalk, Conn.-based mechanical and electrical construction services, industrial and energy infrastructure and building services company.

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