NN amends covenants under $150 million term loan, ABL facility

By Wendy Van Sickle

Columbus, Ohio, March 7 – NN, Inc. amended its $150 million term loan with funds managed by Oaktree Capital Management, LP and its asset-backed credit facility with JPMorgan Chase Bank, according to a press release.

The amendment increases the maximum total leverage ratio covenants for the duration of the term loan, which matures in September 2026.

They also incorporate a new $20 million domestic liquidity covenant, tested quarterly for the duration of the term loan. The amount will reduce to $15 million if a qualifying equity raise occurs by June 30.

Also, the existing cap on customer receivable financing programs has been increased to $30 million from $20 million.

Penny warrants were issued, in lieu of cash, as a term loan amendment fee, with additional penny warrants to be issued if a qualifying equity raise is not completed by June 30.

“These amendments provide us operational flexibility and allow us time to complete our facility rationalization plan and other actions, which will improve our profitability and free cash flow,” Mike Felcher, NN senior vice president and chief financial officer, said in the release.

NN is a diversified industrial company based in Charlotte, N.C.

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