Oshkosh gets five-year $600 million revolver, $400 million term loan

By Toni Weeks

San Luis Obispo, Calif., March 21 - Oshkosh Corp. entered into an amended and restated credit agreement that provides for a $600 million revolving credit facility and a $400 million term loan facility, according to an 8-K filing with the Securities and Exchange Commission. Both tranches mature in March 2019.

The credit agreement closed on March 21 with Bank of America, NA as administrative agent and swingline lender and replaces the company's existing credit agreement.

The term loan facility is due in quarterly principal installments of $5 million beginning Sept. 30, 2014 with a $310 balloon payment due at maturity.

Availability under the revolver is reduced by the company's roughly $79.5 million outstanding letters of credit as of March 21.

Oshkosh may increase the aggregate revolving and/or term loan commitments or add one or more additional term loan tranches in an amount up to the greater of (i) $750 million and (ii) any amount so long as, on a pro forma basis, after giving effect to such increase, the senior secured leverage ratio as of the date of the most recent financial statements does not exceed 2:00 to 1.00.

Borrowings initially bear interest at Libor plus 150 basis points. The margin over Libor may range from 125 bps to 200 bps depending on the leverage ratio. The company must also pay a commitment fee, which is initially 25 bps and may range from 22.5 bps to 35 bps, also depending on leverage. A letter-of-credit fee will apply at a rate of 125 bps to 200 bps of the maximum amount available to be drawn for each letter of credit issued and outstanding.

As of the last day of any fiscal quarter, the company must adhere to financial covenants, including

• A maximum leverage ratio of 4.5 to 1.00, or of 3.75 to 1.00 if the company elects to release its collateral under the credit agreement, which is allowed only during a period that the company maintains an investment-grade corporate family rating;

• A minimum interest coverage ratio of 2.50 to 1.00; and

• A maximum senior secured leverage ratio of 3.00 to 1.00.

The company's obligations under the agreement are guaranteed by some of its subsidiaries, and the company is guaranteeing the obligations of some subsidiaries as well. The credit agreement is secured by a first-priority perfected lien on substantially all of the personal property of the company and each subsidiary guarantor, mortgages on certain real property of the company and its domestic subsidiaries and an equity pledge from each material subsidiary of the company.

On March 21, no loans were outstanding under the revolving credit facility, other than the letters of credit, and the company borrowed $400 million of term loans to refinance the company's existing credit agreement, to pay fees and expenses related to the closing of the credit agreement and for other corporate purposes.

JPMorgan Chase Bank, NA, Royal Bank of Scotland plc and Wells Fargo Bank, NA are co-syndication agents.

Credit Agricole Corporate and Investment Bank, HSBC Bank USA, NA, PNC Bank, NA, TD Bank, NA, Sumitomo Mitsui Banking Corp., NY Branch, SunTrust Bank and U.S. Bank NA are co-documentation agents.

BofA Merrill Lynch, J.P. Morgan Securities LLC, RBS Securities Inc. and Wells Fargo Securities, LLC are joint lead arrangers and joint bookrunners.

Oshkosh is an Oshkosh, Wis.-based specialty vehicle and equipment company.

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