Mueller cuts leverage below 1x, repays $35 million in restructuring

By Devika Patel

Knoxville, Tenn., Sept. 20 – Mueller Water Products, Inc. has been focused on decreasing its debt levels, having repaid a $35 million term loan in the third quarter as part of a debt restructuring initiative, and now has nothing outstanding under its asset-based lending facility and a net debt to EBITDA ratio of less than 1x.

“Importantly, we’ve done a nice job of paying down our debt,” executive vice president and chief financial officer Marietta Edmunds Zakas said at the D.A. Davidson 17th Annual Diversified Industrials & Services Conference in Chicago on Thursday.

“We’ve got our net debt leverage ratio [at] less than 1x right now.

“We have historically generated free cash flow and we think we’re well-positioned from a capital allocation perspective to return value to shareholders and importantly invest in future growth opportunities.

“We have focused on decreasing both the absolute level of debt as well as our net debt leverage,” she said.

The company also restructured its debt in the third quarter.

“When we did our debt refinancing in the third quarter, we also paid down about $35 million when we retired the term loan that we previously had,” Zakas said, adding that the company currently has a $450 million senior secured note.

“We think that it gives us additional flexibility.

“We fixed an interest rate of 5½%, and we extended the term out eight years with this,” she said.

The company also has nothing outstanding under its asset-based lending facility.

“It’s got a notional amount, I’d say, of $175 million, had about $112 million of borrowing capacity under it, but we had nothing outstanding as of the end of the year,” she said.

Mueller is an Atlanta-based manufacturer and distributor of water infrastructure products.

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