Oshkosh amends loan, modifying covenants and pricing

By Sara Rosenberg

New York, March 9 - Oshkosh Corp. amended its credit facility, revising covenants and increasing pricing, according to an 8-K filed with the Securities and Exchange Commission on Monday.

Under the amendment, the maximum permitted leverage ratio was increased to 5.75 for the quarter ending March 31, 7.25 at June 30 and Sept. 30, 7.00 at Dec. 31, 6.75 at March 31, 2010, 6.5 at June 30, 2010 through June 30, 2011, 5.5 at Sept. 30, 2011 through June 30, 2012, 4.25 at Sept. 30, 2012 through June 30, 2013, and 3.75 thereafter.

Prior to the amendment, the leverage ratio was 4.25 from March 31 through Sept. 30, and 3.75 thereafter.

Also, the minimum interest coverage ratio was reduced from 2.50 as of the last day of any fiscal quarter to 1.95 at March 31, 1.64 at June 30, 1.58 at Sept. 30, 1.49 at Dec. 31, 1.52 at March 31, 2010, 1.56 at June 30, 2010 through Dec. 31, 2010, 1.70 at March 31, 2011 and June 30, 2011, 1.88 at Sept. 30, 2011 through June 30, 2012, 2.48 at Sept. 30, 2012 through June 30, 2013, and 2.47 thereafter.

In addition, the amendment added a senior secured leverage ratio limitation beginning with the quarter ending June 30, 2011 of 5.00, moving to 4.5 at Sept. 30, 2011 through June 30, 2012, 3.25 at Sept. 30. 2012 through June 30, 2013 and 3.00 at Sept. 30, 2013.

As for pricing, the term loan B rate was increased to Libor plus 600 basis points and pricing on the revolver can range from Libor plus 500 bps to 600 bps depending on leverage, with the initial rate set at Libor plus 600 bps.

Furthermore, the amendment removed the $250 million accordion feature, increased the frequency of mandatory prepayments from excess cash flow, limited capital expenditures, and limited the amount of dividends, stock repurchases and other restricted payments.

As part of the amendment, the company is required to repay $100 million of its term loan debt.

The amendment was completed on March 6 and is effective as of March 9.

Bank of America is the administrative agent on the deal.

Oshkosh is an Oshkosh, Wis.-based designer, manufacturer and marketer of specialty access equipment, commercial, fire & emergency and military vehicles and vehicle bodies.

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