Kennametal amends credit agreement to modify covenants, pricing grid

By Sarah Lizee

Olympia, Wash., Sept. 14 – Kennametal Inc., Kennametal Europe GmbH and other subsidiaries amended their credit agreement on Thursday with Bank of America, NA as administrative agent to amend financial covenants and the pricing grid, according to an 8-K filing with the Securities and Exchange Commission.

BofA is euro swingline lender, PNC Bank, NA and JPMorgan Chase Bank, NA are co-syndication agents, and Citizens Bank, NA, MUFG Bank, Ltd. and Mizuho Bank, Ltd. are co-documentation agents.

The amendment permits increases in the consolidated leverage ratio to 4.25 to 1.00 during the period from Sept. 30 through and including Dec. 31, 2021, and permits borrowers to include 60% of the unrestricted cash held outside of the United States in the calculation of consolidated leverage ratio.

It also amends the definition of consolidated EBITDA to increase the limit on aggregate, cumulative cash restructuring charge add-backs to $120 million from $80 million.

The amendment includes related changes to the pricing grid and procedures for determining a successor rate to replace Libor.

Currently interest is Libor plus 101 basis points to 157.5 bps, and the commitment fee is 14 bps to 30 bps, both based on credit ratings.

After the covenant relief period, pricing will be Libor plus 81 bps to 137.5 bps, and the commitment fee will be 9 to 25 bps.

Kennametal is a Latrobe, Pa., manufacturer, marketer and distributor of cutting tools, tooling systems, supplies and technical services and wear-resistant parts.

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