Stewart Information enters into $125 million five-year revolver

By Tali Rackner

Norfolk, Va., Oct. 23 – Stewart Information Services Corp. entered into a $125 million revolving credit facility on Tuesday, according to an 8-K filing with the Securities and Exchange Commission.

The facility, which matures on Oct. 21, 2019 and may be increased by an additional $50 million, replaces the company’s existing credit agreement.

Compass Bank is the administrative agent, bookrunner, lead arranger, issuing bank and swingline lender.

Borrowings initially bear interest at Libor plus 175 basis points. The margin over Libor ranges from 150 bps to 200 bps, based on Stewart’s consolidated leverage ratio.

There is a 25 bps to 35 bps commitment fee, also based on the consolidated leverage ratio.

The agreement also contains certain consolidated financial covenants requiring (a) a minimum fixed-charge ratio of 1.25 to 1.00 on a trailing four-quarter basis, (b) a maximum leverage ratio for the prior four consecutive quarters of 2.25 to 1.00 and (c) a maximum of $20 million of capital expenditures consolidated in any calendar year, with certain allowances for carryover of unused amounts.

As of Tuesday, there was $60 million outstanding under the facility.

Proceeds will be used for general corporate purposes.

Stewart Information Services is a Houston-based title insurance company.

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