G&K closes $350 million five-year revolver at Libor plus 100-175 bps

By Susanna Moon

Chicago, April 16 – G&K Services, Inc. said it refinanced with a new $350 million five-year revolving credit facility, which may be upsized by $200 million for a total size of $550 million.

Interest will be Libor plus 100 basis points to 175 bps, based on leverage.

The facility replaces the company’s $250 million revolver, which was set to expire in March 2017, according to a company press release.

The facility was arranged by Wells Fargo Securities, LLC, J.P. Morgan Securities LLC and Bank of America Merrill Lynch.

Proceeds will be used to repay its $75 million of variable-rate unsecured private placement notes due June 30, 2015.

The company said it has entered into a long-term interest rate swap contract for $75 million, which will limit the company’s exposure to interest rate risk. The 15-year swap contract has a forward start date of July 1, 2016 and effectively fixes Libor at a rate of 2.35%.

The previous facility had borrowings of $30 million at closing.

The facility will mature on April 15, 2020.

The agreement “provides us with even greater financial flexibility to pursue our game plan and capital deployment strategies,” Tracy C. Jokinen, the company’s chief financial officer, said in the press release.

G&K Services is a Minneapolis-based provider of branded uniform and facility services programs.

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