Methode Electronics ups multicurrency revolver to $750 million

By Mary-Katherine Stinson

Lexington, Ky., Nov. 1 – Methode Electronics, Inc. entered into a second amended and restated credit agreement which increases the multicurrency revolving credit commitments under the existing agreement to $750 million, refinances in full and terminates the term loan facility under the existing agreement and makes certain other changes to the covenants, terms, and conditions under the existing credit agreement, according to an 8-K filing with the Securities and Exchange Commission.

The company may obtain letters of credit under the credit agreement up to $30 million and increase the revolving commitments and/or add one or more tranches of term loans under the credit agreement up to $250 million plus an additional amount so long as the leverage ratio would not exceed 3x on a pro forma basis.

Dollar-denominated loans bear interest at SOFR plus a margin between 137.5 basis points and 225 bps based on the company’s consolidated leverage ratio. The margin is the same for borrowings in other currencies, even when the benchmark varies.

There are commitment fees ranging between 20 bps and 35 bps on the daily unused portions of the revolving credit facility based on the company’s consolidated leverage ratio and customary letters of credit fees.

There are no prepayment penalties.

The credit agreement matures Oct. 31, 2027.

As of Oct. 31, there were approximately $200 million of outstanding revolving loans under the agreement.

Bank of America, N.A. is the administrative agent, swing line lender, and letter of credit issuer

BofA Securities, Inc. and Wells Fargo Securities, LLC are the joint lead arrangers and joint bookrunners.

Wells Fargo Bank, NA is the syndication agent.

PNC Bank, NA and TD Bank, NA are the co-documentation agents.

The company used the proceeds to refinance debt and expects to use the proceeds of other borrowings under the credit agreement for working capital.

The credit agreement amends and restates the amended and restated credit agreement dated Sept. 12, 2018.

Chicago-based Methode designs, manufactures and markets electronic components.

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