GenCorp seeks loan amendment to provide for new $154.5 million credit-linked facility

By Sara Rosenberg

New York, June 8 - GenCorp Inc. is looking to amend its credit facility to provide for a new $154.5 million credit-linked facility that would replace its existing $98.5 million credit-linked facility, according to an 8-K filed with the Securities and Exchange Commission Thursday.

Wachovia is the lead bank on the deal.

The new facility consists of an $80 million letter-of-credit sub-facility, with a $20 million accordion feature, and a $74.5 million term loan sub-facility on terms and conditions substantially similar to the existing facility.

By comparison, the existing facility consists of a $44.3 million letter of credit sub-facility and a $54.2 million term loan sub-facility that will be repaid with proceeds from the sale of the company's Fine Chemicals business.

Proceeds from the new $74.5 million term loan will be used for general corporate purposes, and $19.8 million will be placed in a cash collateral account to repay the company's 5¾% convertible notes due April 15, 2007 upon maturity or conversion.

The company's $80 million revolver will be unaffected by this transaction.

In order for the amendment to pass, the company must receive consents from the holders of its 9½% senior subordinated notes to allow for the additional bank debt. The consent solicitation process has already commenced.

GenCorp is a Rancho Cordova, Calif., manufacturer of technology-based aerospace and defense products.

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