General Cable refinances loan with $400 million five-year revolver

By Susanna Moon

Chicago, July 22 - General Cable Corp. refinanced its loans with a 400 million five-year asset-based revolving credit facility with JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

Interest on the new revolver will be Libor plus 150 basis points to 200 bps, and the facility may be increased by up to $100 million.

There is an unused fee of 37.5 bps to 50 bps and participation fees of 150 bps to 200 bps per year based on the average daily amount of letter of credit exposure as well as a fronting fee of 12.5 bps per year on the average daily amount of letter of credit exposure to the issuing bank.

The facility will be due on July 21, 2016 but the maturity may be pushed up under some circumstances.

The maturity will automatically become Aug. 16, 2013 unless:

• The company refinances its $355 million principal amount of 0.875% senior convertible notes due 2013 with debt that matures or is mandatorily redeemable not earlier than six months after the maturity date, or

• The borrowers have enough liquidity so that after giving pro forma effect to the repayment of the convertibles, availability under the facility is at least $100 million and the fixed charge coverage ratio is not less than 1.15 times for the most recently ended quarter.

The maturity date will automatically become Dec. 31, 2014 unless:

• The company refinances its $125 million principal amount of senior floating-rate notes due 2015 with debt that matures or is mandatorily redeemable not earlier than the date that is six months after maturity, or

• The borrowers have sufficient liquidity so that after giving pro forma effect to the repayment of the floaters, availability under the facility is at least $100 million and the fixed charge coverage ratio is not less than 1.15 times for the most recently ended quarter.

The credit agreement includes a $100 million sub-limit for the issuance of letters of credit, of which $10 million is available to the Canadian borrower, and a $25 million sublimit for swingline loans, of which $5 million is available to the Canadian borrower.

Proceeds will be used to refinance debt and for working capital and general corporate purposes.

The facility may be prepaid without premium or penalty.

The fixed charge coverage ratio must be at least 1 times for any period of four consecutive fiscal quarters ending on the last day of each fiscal quarter, beginning with the fiscal quarter ending immediately preceding a covenant trigger period, which is each period beginning on any day that availability under the facility is less than $40 million or 10% of the sum of the total revolving commitments at the time.

The credit agreement replaced the company's existing credit agreement, effective as of Monday.

Debt under the facility is guaranteed by some of the company's U.S. and Canadian subsidiaries and is secured by a first-priority security interest in property and assets of the company's U.S. and Canadian subsidiaries.

In order to support ongoing business requirements, portions of the facility will be available for issuing letters of credit, according to a company press release.

"The refinancing of our senior secured credit facility in the U.S. and Canada enhances our financial flexibility to fund our working capital requirements and capitalize on global development opportunities," Brian J. Robinson, executive vice president, chief financial officer and treasurer, said in a press release.

"We are pleased to have extended our maturity profile at attractive rates and terms while at the same time increasing our global operating flexibility. Our maturity profile and capital structure are in good order following this refinancing and the convertible notes exchange offer we completed in December 2009, which resulted in the issuance of $429.5 million of subordinated convertible notes due in 2029. We are well positioned and have the flexibility to continue to execute on our long-term growth strategies."

General Cable produces and distributes copper, aluminum and fiber optic wire and cable and is based in Highland Heights, Ky.

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