L-3 Communications gets $1 billion five-year revolver at lower rate

By Angela McDaniels

Tacoma, Wash., Oct. 31 – L-3 Communications Holdings, Inc. subsidiary L-3 Communications Corp. replaced its revolving credit facility with a new $1 billion revolver due Oct. 31, 2021 on Monday, according to an 8-K filing with the Securities and Exchange Commission.

The new credit agreement reduces the margin over Libor to a range of 112.5 basis points to 200 bps from a range of 125 bps to 200 bps. The exact margin depends on the company’s long-term senior debt rating.

The new credit agreement also provides for up to $600 million of uncommitted incremental revolving facilities and additional term loan facilities.

The lead arrangers and bookrunners are Bank of America Merrill Lynch, Barclays Bank plc, Deutsche Bank Securities Inc., Sumitomo Mitsui Banking Corp., SunTrust Robinson Humphrey Inc., Bank of Nova Scotia, MUFG, U.S. Bank NA and Wells Fargo Bank NA. The documentation agents are Deutsche Bank Securities, Sumitomo Mitsui, SunTrust Bank, Scotiabank, MUFG, U.S. Bank and Wells Fargo Bank. Barclays is the syndication agent. Bank of America is the administrative agent.

Under the new credit agreement’s financial covenants, the company’s consolidated interest coverage ratio must be greater than 3.0 to 1.0, and its consolidated leverage ratio must be less than 3.75 to 1.0; provided that the cap on leverage will be 4.0 to 1.0 as of the end of each of the four fiscal quarters immediately following a material acquisition.

Borrowings under the revolver are guaranteed by substantially all of L-3 Communications’ wholly owned material domestic subsidiaries until certain ratings thresholds are reached.

L-3 Communications is a New York-based contractor in command, control, communications, intelligence, surveillance and reconnaissance systems, aircraft modernization and maintenance and government services. It is also a provider of electronic systems used on military and commercial platforms.

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