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RPM International closes $400 million of thee-year term loans
By Wendy Van Sickle
Columbus, Ohio, Feb. 27 – RPM International Inc. and its subsidiary, RPM New Horizons Netherlands, BV, entered into a $400 million unsecured syndicated term loan facility credit agreement with PNC Bank, NA as administrative agent on Feb. 21, according to an 8-K filing with the Securities and Exchange Commission.
The term loans consist of $300 million to RPM international and $100 million to RPM New Horizons, each of which was fully advanced on the closing date.
The term loans mature on Feb. 21, 2023, with no scheduled amortization before that date.
Interest is equal to Libor plus an applicable margin based on the company’s debt rating. The company and the RPM New Horizons entered into multicurrency floating to fixed interest rate swap agreements that effectively fix interest payment obligations on the entire principal amount of the term loans through their maturity at 0.612% per annum on $300 million term loan and 0.558% per annum on the $100 million term loan.
PNC Capital Markets LLC is the lead arranger and bookrunner.
The credit agreement requires that the company not permit its consolidated interest coverage ratio to be less than 3.5 to 1.0 or its leverage ratio to exceed 3.75 to 1.00. However, the maximum permitted leverage ratio can be relaxed to 4.25 to 1.00 for a one-year period in connection with some material acquisitions.
The proceeds of the term loans were used to repay borrowings under the company’s revolver. After giving effect to such repayment, the company has about $820 million of borrowing availability on its $1.3 billion revolver.
RPM is a Medina, Ohio-based company that manufactures and markets specialty chemical products for industrial and consumer markets.
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