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Kadant gets $100 million five-year revolver with $50 million accordion
By Toni Weeks
San Diego, Aug. 3 - Kadant Inc. entered into a $100 million five-year unsecured revolving credit facility with RBS Citizens, NA as administrative agent and multi-currency administrative agent on Friday, according to an 8-K filing with the Securities and Exchange Commission. Of the amount, $5 million is subject to future joinder by a foreign bank.
The agreement also includes an uncommitted unsecured incremental borrowing facility of up to an additional $50 million.
Borrowings will bear interest at Libor plus 100 to 200 basis points based on the company's debt-to-EBITDA ratio.
The agreement requires the company to maintain a maximum consolidated leverage ratio of 3.5 to 1, maximum annual capital expenditures of $25 million and a minimum consolidated interest charge coverage ratio of 3 to 1.
RBS Citizens and Wells Fargo Securities, LLC are the joint lead arrangers, and Wells Fargo Bank, NA is the syndication agent.
Loans under the credit agreement are guaranteed by some domestic subsidiaries of Kadant.
At closing, Kadant borrowed $5 million under the facility to pay off debt under its Feb. 13, 2008 credit agreement, which was subsequently terminated.
Kadant also announced that it amended the covenants and some restrictions under its uncommitted $100 million multi-currency note purchase and private shelf agreement with Prudential Capital Group. Under the agreement, Kadant may issue up to $100 million of senior unsecured promissory notes, of which up to the equivalent of $75 million may be in other currencies, for up to 12 years.
Kadant is a Westford, Mass.-based supplier to the pulp and paper industry.
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