CTS gets $400 million five-year revolving credit facility

By Wendy Van Sickle

Columbus, Ohio, Dec. 17 – CTS Corp. and subsidiary CTS Ceramics Denmark A/S entered into a five-year unsecured credit agreement on Wednesday that provides for a $400 million revolver with BMO Harris Bank NA as administrative agent and BMO Capital Markets Corp. as bookrunner, according to an 8-K filing with the Securities and Exchange Commission.

The new revolver replaces the company’s $300 million revolver, which was due to expire on Feb. 12, 2024.

There is a $20 million sublimit for letters of credit and a $20 million sublimit for swingline loans.

Borrowings bear interest at SOFR plus a margin that varies from 100 basis points to 175 bps based on leverage ratio. The commitment fee ranges from 17.5 bps to 25 bps, also based on leverage ratio.

BMO Capital Markets, Bank of America, NA, Wells Fargo Bank, NA and U.S. Bank, NA are the joint lead arrangers.

The credit agreement requires the company to maintain a net leverage ratio of not greater than 3.5 to 1, which may rise to 4.0 to 1 for the four quarters after a permitted acquisition, and a minimum interest coverage ratio of 3.0 to 1.

Proceeds may be used to refinance existing debt, to finance permitted acquisitions and for working capital.

CTS is an Elkhart, Ind.-based electronic components and sensors company.

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