Smith & Wesson gets expanded $75 million revolver due 2016, cuts rates

By Susanna Moon

Chicago, Aug. 19 - Smith & Wesson Holding Corp. obtained a $75 million unsecured revolving credit facility last Thursday at improved terms and reduced rates, with a pricing cut of 75 basis points, according to an 8-K filing with the Securities and Exchange Commission.

The facility was arranged by TD Securities (USA) LLC as lead arranger and bookrunnner and TD Bank, NA as administrative agent. TD Bank, BB&T and People's United Bank also are lenders.

Interest on the loans is initially Libor plus 150 bps, based on leverage, or about 1.7% using current Libor rates. The spread ranges from Libor plus 150 bps to 250 bps.

Proceeds will be used for general corporate purposes.

The maturity date was extended by about two years.

The terms contain an accordion feature that allows the company to increase the size of the facility in $25 million increments up to a maximum loan of $175 million.

The facility replaces the company's $55 million credit facility that was set to expire in December 2014 and matures on the earlier of Dec. 15, 2016 or the date that is six months in advance of the maturity of any permitted notes under the credit agreement.

"This is the first time in the company's history that we have achieved credit agreement terms comparable to what investment grade companies receive in the current market," Jeffrey D. Buchanan, Smith & Wesson executive vice president and chief financial officer, said in a company press release.

"This represents another step in our commitment to developing flexibility within our capital structure."

Smith & Wesson makes firearms and related products and is based in Springfield, Mass.

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