Kimball extends credit facility to 2017, lowers to $75 million

By Toni Weeks

San Diego, Dec. 20 - Kimball International, Inc. amended and restated its five-year credit agreement with JPMorgan Chase Bank, NA as agent and letter-of-credit issuer, according to an 8-K filing with the Securities and Exchange Commission.

The credit facility is now due Dec. 18, 2017, extended from April 23, 2013, and allows for up to $75 million in borrowings, which was decreased from $100 million in the previous facility. The amount available may be increased to $115 million, subject to consent of participating banks.

According to the 8-K, the company elected to decrease the borrowing limit because it felt that its principal sources of liquidity from available funds on hand, cash generated from operations and availability under the amended agreement would be sufficient for the foreseeable future. Currently there are no borrowings outstanding under the facility.

Amounts under the revolving credit loans may be advanced in dollars or any other currency, with lender approval. Proceeds of the revolvers are slated for general corporate purposes, including acquisitions.

Up to $30 million will be available for the issuance of letters of credit.

Borrowings bear interest at Libor plus 100 basis points to 150 bps, based on the company's ratio of consolidated debt to consolidated EBITDA. There is a commitment fee on the unused portion of 20 bps to 25 bps, also based on consolidated debt to consolidated EBITDA.

Under the agreement, the company's financial covenants require a ratio of consolidated debt to consolidated EBITDA not greater than 3 times and a consolidated net worth of net less than $362 million.

J.P. Morgan Securities LLC is the bookrunner and lead arranger for the facility. Bank of America, NA is the syndication agent, and PNC Bank, NA is the documentation agent. HSBC Bank USA, NA is an additional lender.

The Jasper, Ind.-based company provides electronic manufacturing services as well as office and hospitality furniture.

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