Kennametal restates $700 million five-year credit facility

By William Gullotti

Buffalo, N.Y., June 15 – Kennametal Inc. and wholly owned foreign subsidiary Kennametal Europe GmbH entered into a $700 million five-year unsecured sixth amended and restated credit agreement with Bank of America, NA as administrative agent on June 14, according to an 8-K filing with the Securities and Exchange Commission.

The agreement amends, restates and replaces the company’s fifth amended and restated credit agreement dated June 21, 2018.

The agreement, which terminates June 14, 2027, includes a $300 million accordion feature.

As with previous agreements, loans are available on a revolving basis in dollars, euros, pounds, Canadian dollars and Japanese yen with a $300 million sublimit for multicurrency borrowings.

Also unchanged from the previous agreement, there is a $50 million sublimit for letters of credit and a $100 million sublimit for swingline loans, with $75 million of that amount available to the parent and $25 million available to Kennametal Europe. The sublimit for loans to foreign borrowers is $250 million.

Borrowings bear interest at SOFR, Euribor, CDOR, Sonia or Tibor plus 78.5 basis points to 140 bps, and the facility fee ranges from 9 bps to 22.5 bps. Fees on standby letters of credit range from 78.5 bps to 140 bps, with the fees for trade letters of credit ranging from 57.5 bps to 100 bps.

Margins and fees are based on the company’s debt rating as specifically determined by Moody’s Investors Service and S&P Global Ratings.

The company must maintain a maximum consolidated leverage ratio of not more than 3.75 to 1, which may be increased to 4.0 to 1 on no more than two occasions for qualified acquisitions. The ratio is calculated on a rolling four-quarter basis.

BofA Securities, Inc., PNC Capital Markets LLC and JPMorgan Chase Bank, NA are joint lead arrangers and bookrunners.

PNC Bank, NA and JPMorgan are co-syndication agents with BNP Paribas, Citizens Bank, NA, Mizuho Bank, Ltd. and U.S. Bank NA as co-documentation agents.

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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