Matrix Service gets another amendment to its credit agreement with JPMorgan

By Susanna Moon

Chicago, Feb. 13 - Matrix Service Co. entered into a second amendment to the second amended and restated credit agreement on Feb. 11 with JPMorgan Chase Bank, NA as administrative agent, lender and issuing bank.

The amendment provided the following revisions:

• Raised the limitation on share repurchases to $25 million in any calendar year from $25 million for the life of the credit agreement;

• Eliminated the prior limitation on acquisitions of $7.5 million in any consecutive 12-month period and $20 million for the life of the credit agreement so long as the company's senior leverage ratio on a pro forma basis as of the end of the fiscal quarter immediately preceding the acquisition is below 1 to 1 and availability under the revolving loan commitment is at or above 50% after consummation of the acquisition. If the senior leverage ratio on a pro forma basis is over 1 to 1 but below 1.75 to 1, acquisitions will be limited to $25 million in a 12-month period, provided there is at least $25 million of availability under the revolving loan commitment;

• Modified a financial covenant to require that the company maintain a tangible net worth at least the sum of $110 million plus the net cash proceeds of any stock issuance that occurs after Nov. 30 plus 50% of all positive quarterly net income after Nov. 30. Previously, the company was required to maintain a tangible net worth of no less than the sum of $55.6 million plus the net cash proceeds of any stock issuance that occurred after Aug. 31, 2006 plus 75% of all positive quarterly net income after Aug. 31, 2006. As of Nov. 30, the company was required to maintain a tangible net worth of at least $98.5 million;

• Changed amounts borrowed under the credit facility to bear interest at Libor or an alternate base rate plus an additional margin based on the senior leverage ratio. The alternate base rate is the greater of the Prime rate, Federal Funds Effective rate plus 50 basis points or the adjusted LIBO rate plus 100 bps. The additional margin ranges on alternate base rate loans are between 100 bps and 175 bps and 200 bps and 275 bps on Libor-based loans. The company will also pay an unused revolving credit facility fee of between 35 bps and 50 bps based on the senior leverage ratio. The company is currently at the lowest margin tier for both Libor and alternate base rate loans and the lowest fee tier for the unused revolving credit facility fee.

Previously, the alternate base rate was the greater of the Prime rate or the Fed Funds Effective rate plus 50 bps. The additional margin ranges on the alternate base rate loans were between 0 bps and 25 bps and from between 100 bps and 175 bps on Libor-based loans. The company also paid an unused revolving credit facility fee of between 17.5 bps and 37.5 bps based on the senior leverage ratio.

Matrix is a Tulsa, Okla.-based industrial services company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.