Griffon ups revolver to $225 million via JPMorgan, lowers pricing

By Toni Weeks

San Luis Obispo, Calif., April 1 - Griffon Corp. amended and extended its cash flow revolving credit facility on March 28 with JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filed Monday with the Securities and Exchange Commission.

The amended facility provides for borrowings of up to $225 million, an increase of $25 million from the previous $200 million facility, and includes a sublimit for letters of credit of $60 million, up from $50 million. The facility also has a multi-currency subfacility of $50 million, a swingline subfacility of $30 million and a $75 million accordion feature that is subject to lender support.

Borrowings currently bear interest at Libor plus 225 basis points without a floor, down from the previous margin of 275 bps. The margin depends on Griffon's leverage ratio and can range from 150 bps to 250 bps.

The facility contains the following three financial maintenance tests:

• A consolidated leverage ratio calculated as a ratio of consolidated net funded debt to consolidated EBITDA initially of 5:00 to 1:00, stepping down over the life of the facility;

• A consolidated senior secured leverage ratio calculated as a ratio of consolidated senior secured funded debt to consolidated EBITDA of 2.5 to 1.00; and

• A consolidated interest coverage ratio calculated as a ratio of consolidated EBITDA to consolidated interest expense of 2.75:1.00.

The facility, which now matures March 28, 2018, as compared to the previous March 2016, is guaranteed by Griffon's material domestic subsidiaries and is collateralized by substantially all of the assets of the company and its material domestic subsidiaries.

Proceeds will support Griffon's working capital requirements and anticipated growth strategies.

The company has no borrowings outstanding under the credit facility, according to a press release, although there are about $23 million of standby letters of credit currently outstanding.

Certain negative covenants, such as those relating to restricted payments and acquisitions, were modified in the amended facility to give the company additional operating flexibility.

Deutsche Bank Securities Inc. is the syndication agent, and Wells Fargo Bank, NA, HSBC Bank USA, NA and RBS Citizens, NA are co-documentation agents. J.P. Morgan Securities LLC is the lead arranger and bookrunner.

Griffon is a New York-based management and holding company that conducts its business through three segments: home and building products; high-technology, integrated information, communication and sensor-system solutions; and embossed, laminated and printed specialty plastic films.

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