Spirit AeroSystems enters into $1.26 billion restated credit agreement

By Tali Rackner

Minneapolis, July 13 – Spirit AeroSystems Holdings, Inc. and borrower Spirit AeroSystems, Inc. entered into a $1.26 billion senior unsecured second amended and restated credit agreement on Thursday with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The facility consists of a $800 million revolving credit facility, a $206 million term loan A facility and a $250 million delayed-draw term loan facility.

There is an accordion option that allows the company to increase the revolver by up to $750 million.

The credit agreement matures on July 12, 2023.

Interest on each portion is equal to Libor plus 137.5 basis points. The spread over Libor ranges from 112.5 bps to 187.5 bps, depending on Spirit’s S&P and/or Moody’s Investors Service senior unsecured debt rating.

The delayed-draw term loan may be drawn until Jan. 12, 2019, which may be extended for two additional three-month periods, in each instance subject a lender fee based on the undrawn commitment.

Some financial covenants require Spirit to maintain a minimum interest coverage ratio of 4 times. It must also maintain a maximum total leverage ratio of 3.5 times, provided that it will increase to 4 times in connection with some designated transactions.

The credit agreement refinances and replaces the amended and restated credit agreement dated June 6, 2016.

Term loan proceeds were used to pay off outstanding amounts under the prior credit agreement and the remainder will be used for general corporate purposes.

Mizuho Bank, Ltd., Citibank, NA and Merrill Lynch, Pierce, Fenner & Smith Inc. are the joint lead arrangers on the deal, with Merrill Lynch as the bookrunner. Mizuho and Citibank are co-syndication agents. Bank of Nova Scotia, Royal Bank of Canada and U.S. Bank NA are co-documentation agents.

Spirit AeroSystems is a Wichita, Kan.-based maker of commercial and military airplane components, including fuselages, propulsion systems and wings.

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