Kaydon gives further details of $400 million facility led by JPMorgan

By Angela McDaniels

Tacoma, Wash., March 30 - Kaydon Corp. released more information about its $400 million senior credit facility in an 8-K filing with the Securities and Exchange Commission on Friday.

The facility matures March 27, 2017 and includes a $150 million term loan and a $250 million revolving credit facility.

The initial interest rate is Libor plus 117.5 basis points for the revolver and 137.5 bps for the term loan. The initial commitment fee for the revolver is 17.5 bps to 40 bps.

The margin over Libor ranges from 95 bps to 197.5 bps for the revolver and from 112.5 bps to 237.5 bps for the term loan. They depend on the company's leverage ratio.

The revolver has a $175 million accordion feature.

Up to $50 million of the revolver may be borrowed in currencies other than dollars. There is a $50 million sublimit for letters of credit and a $25 million sublimit for swingline loans.

JPMorgan Chase Bank is the administrative agent. PNC Bank, NA, SunTrust Bank and Wells Fargo Bank, NA are the syndication agents. J.P. Morgan Securities is the bookrunner and lead arranger.

The financial covenants require the company to maintain a maximum leverage ratio of 3.5 times and a minimum interest coverage ratio of 3 times.

The credit agreement is guaranteed by the company and some of its current domestic subsidiaries and is secured by a pledge of 65% of the outstanding equity of subsidiary KAC Europe CV.

The company entered into the facility on March 26 and announced it in a news release that day.

The company used the proceeds of the term loan to fund a portion of its $10.50-per-share special dividend. The balance of the $337 million dividend was funded with existing cash balances.

The proceeds of the revolver are available for working capital and general corporate purposes, including for permitted acquisitions and to pay dividends or for stock repurchases.

The company terminated its previous $250 million senior revolving credit facility.

Kaydon makes custom-engineered, performance-critical products. It is based in Ann Arbor, Mich.

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