Knowles enters restated $400 million senior secured revolver due 2028

By Marisa Wong

Los Angeles, Feb. 9 – Knowles Corp. entered into an amended and restated credit agreement on Feb. 8 for an up to $400 million senior secured revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement amends and restates the company’s credit agreement dated Sept. 4, 2020 to extend the maturity date of the credit facility to February 2028 from January 2024, replace Libor with term SOFR as a reference rate, amend the minimum interest coverage ratio and amend some other financial covenants.

Up to $100 million of the revolver will be available in euros, pounds sterling and other currencies, and up to $50 million will be made available in the form of letters of credit denominated in currencies approved by the administrative agent and the issuing banks.

The credit agreement also provides for an up to $20 million swingline facility.

The company will be permitted to increase the commitments under the revolver or to establish one or more incremental term loans in an aggregate principal amount not to exceed the sum of $200 million plus additional amounts, as long as the senior secured leverage ratio does not exceed 2.00 to 1.00.

Commitments will terminate and loans outstanding under the credit facility will mature on Feb. 8, 2028.

Interest will be term SOFR, Sonia or Euribor plus an applicable margin based on the company’s total net leverage ratio. The margin ranges from 150 basis points to 250 bps.

Undrawn amounts accrue a commitment fee of 22.5 bps to 35 bps, based on a leverage ratio grid.

The new credit agreement requires that the company maintain a minimum interest coverage ratio of 3.00 to 1.00; a total net leverage ratio of 3.75 to 1.00; and a maximum senior secured net leverage ratio of 3.25 to 1.00; in each case subject to adjustments in the event of a material acquisition.

JPMorgan Chase Bank, NA is administrative agent.

JPMorgan, BofA Securities, Inc., Sumitomo Mitsui Banking Corp., HSBC Bank USA, NA and Mizuho Bank, Ltd. are joint lead arrangers and joint bookrunners.

Bank of America, NA, Sumitomo Mitsui, HSBC Bank and Mizuho Bank are syndication agents.

PNC Bank, NA and U.S. Bank NA are documentation agents.

Borrowings under the restated revolver are to be used for working capital and other general corporate purposes.

Knowles is an Itasca, Ill.-based supplier of advanced micro-acoustic, audio processing and precision device products.

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