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Kennametal enters five-year $600 million unsecured credit agreement
By Wendy Van Sickle
Columbus, Ohio, April 19 – Kennametal Inc. and subsidiary Kennametal Europe GmbH entered into a unsecured $600 million five-year fourth amended and restated credit agreement on April 15, according to an 8-K filed Thursday with the Securities and Exchange Commission.
The agreement amends, restates and replaces the company’s third amended and restated credit agreement dated June 25, 2010.
Interest is Libor plus 90 basis points to 145 bps, and there is a commitment fee of 10 bps to 30 bps, both depending on Kennametal’s credit rating.
Loans are available on a revolving basis in U.S. dollars, pounds sterling, Canadian dollars and Japanese yen. There is a $300 million sublimit for multicurrency borrowings.
The credit agreement contains 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.
There is also a $250 million accordion feature.
Bank of America Merrill Lynch, PNC Capital Markets LLC and JPMorgan Chase Bank, NA are the joint bookrunners and lead arrangers.
Bank of America NA, London Branch is the euro swingline lender, and Bank of America, NA is the administrative agent, issuing lender and swingline lender.
PNC Bank, NA and JPMorgan Chase Bank, NA are co-syndication agents. Citizens Bank of Pennsylvania, MUFG and Mizuho Bank, Ltd. are co-documentation agents.
The company must comply with a minimum consolidated interest coverage ratio of 3.5 times and a maximum consolidated leverage ratio of 3.75 times, stepping down to 3.5 times commencing with the fiscal quarter ending June 30, 2017.
Proceeds are to be used to refinance debt under the replaced credit agreement and for general corporate purposes.
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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