Kratos Defense signs $200 million revolver, $200 million term loan

By Wendy Van Sickle

Columbus, Ohio, Feb. 22 – Kratos Defense & Security Solutions, Inc. entered into a credit agreement on Feb. 18 providing for a five-year $200 million revolver and a five-year $200 million term loan, according to an 8-K filing with the Securities and Exchange Commission.

The revolver has a $10 million sublimit for swingline loans and a $50 million sublimit for letters of credit.

There is an accordion feature providing for $200 million of incremental capacity plus additional uncommitted incremental capacity subject to a limitation based on the company’s pro forma total net leverage ratio.

Borrowings bear interest at SOFR plus a margin raining from 125 basis points to 225 bps, depending on leverage ratio.

Truist Bank is the administrative agent. Truist Securities, Inc., JPMorgan Chase Bank, NA, PNC Capital Markets LLC and Goldman Sachs Bank USA are the joint lead arrangers and bookrunners.

City National Bank, Fifth Third Bank, NA, First National Bank of Pennsylvania, MUFG Union Bank, NA, Regions Bank and U.S. Bank NA are the co-documentation agents.

At closing, Kratos drew the full term loan and $100 million under the revolver and distributed the amounts, along with cash on hand, to redeem the company’s $300 million 6˝% senior secured notes due November 2025 at a price of 103.25. The redemption is expected to close on March 14.

Kratos is a national security solutions provider based in San Diego.

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