GenCorp amends credit facility, changing size and pricing, allowing for additional debt

By Sara Rosenberg

New York, March 19 - GenCorp Inc. amended its senior credit facility, revising the size and pricing, and allowing for the sale of additional senior unsecured or subordinated debt, according to an 8-K filed with the Securities and Exchange Commission on Friday.

Under the amendment, the revolver was reduced to $65 million from $80 million and an up to $75 million additional term loan was removed.

Pricing on the facility was increased to Libor plus 325 basis points from Libor plus 225 bps, and the revolver commitment fee was increased to 62.5 bps from 50 bps.

The amendment also limits the circumstances under which mandatory prepayments of loans from equity issuances must take place and modifies the definitions of the leverage ratio and net cash proceeds from permitted real estate sales.

In addition, the amendment permits the company to repurchase or refinance its outstanding convertible subordinated notes and senior subordinated notes.

On March 18, the company entered into an agreement with certain holders to repurchase $22.5 million of its 9½% senior subordinated notes at a price of 102 and $14.3 million of its 2¼% convertible subordinated debentures at a price of 93.

Funds for the repurchase came from a portion of the net proceeds of the 4.0625% convertible subordinated debentures issued in December 2009.

Furthermore, the amendment allows the company to conduct a rescission offer, using stock and/or cash of up to $15 million, with respect to certain units issued under the GenCorp Retirement Savings Plan.

The amendment was completed on March 17.

Wachovia is the administrative agent on the deal.

GenCorp is a Rancho Cordova, Calif., technology-based manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the entitlement, sale and leasing of its excess real estate assets.

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