Mohawk gets $1 billion five-year revolving loans at Libor plus 150 bps

By Susanna Moon

Chicago, Sept. 30 - Mohawk Industries, Inc. closed a $1 billion five-year senior unsecured revolving credit facility with an initial rate of Libor plus 150 basis points.

The spread over Libor will be 100 bps to 175 bps, based on leverage, and the commitment fee ranges from 12.5 bps to 25 bps.

The company entered into a credit agreement last Wednesday with Wells Fargo Securities, LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch and SunTrust Robinson Humphrey, Inc. as the joint lead arrangers and lead bookrunners, according to an 8-K filing with the Securities and Exchange Commission.

Wells Fargo Bank, NA is the administrative agent, swingline lender and a letter-of-credit issuer; Bank of America, NA, JPMorgan Chase Bank and SunTrust Bank are the syndication agents; Barclays Bank plc, Mizuho Bank, Ltd., Regions Financial Corp., Bank of Tokyo-Mitsubishi UFJ, Ltd. and U.S. Bank, NA are the documentation agents.

In connection with the new facility, the company terminated the credit agreement dated July 8, 2011 with Bank of America as administrative agent for a $900 million revolver and a $150 million term loan. The facility had been set to expire July 8, 2016.

The new facility will mature on Sept. 25, 2018, with a provision that maturity will accelerate to the date 90 days prior to the maturity of the company's $900 million notes due Jan. 16, 2016 unless the company has liquidity of at least $200 million assuming repayment of those notes in full.

Proceeds will be used for general corporate purposes, including working capital, capital expenditures, financing acquisitions, investments and refinancing other debt.

If at any time (a) either (i) the company's credit rating from Moody's Investors is Baa3 or better (stable outlook or better) and the company's rating from Standard & Poor's is BB+ or better (stable outlook or better) or (ii) the Moody's rating is Ba1 or better (stable outlook) and the S&P Rating is BBB- or better (stable outlook) and (b) no default or event of default has occurred, then the foregoing guarantees will be released. The company will be required to reinstate the guarantees if those ratings are not maintained.

The company is also required to maintain a consolidated interest coverage ratio of at least 3 times and a consolidated net leverage ratio of no more than 3.75 times.

Mohawk, a maker of floor covering products, is based in Calhoun, Ga.

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