AZZ gets $75 million term loan, $225 million revolver via BofA Merrill

By Susanna Moon

Chicago, April 2 - AZZ Inc. closed a $75 million term facility and a $225 million revolving facility on March 27 with BofA Merrill Lynch as lead arranger and book manager, according to an 8-K filing with the Securities and Exchange Commission.

The facility matures on March 27, 2018 and includes a $75 million sublimit for letters of credit and $30 million sublimit for swingline loans.

The revolver has an accordion that allows AZZ to increase the size by up to $75 million, with additional commitments.

Interest on the loans is initially Libor plus 175 basis points and ranges from 100 bps to 200 bps, based on leverage.

Bank of America, NA is the administrative agent. Fifth Third Bank and Compass Bank are co-syndication agents.

The credit agreement replaces the amended and restated agreement dated May 25, 2006 with Bank of America as administrative agent.

Under the terms, the company must maintain a minimum net worth on a consolidated basis of $230,087,012, plus the sum of 50% of net income earned in each fiscal quarter ending after Feb. 29, 2012, plus the net proceeds from the issuance of any equity interests after Feb. 29, 2012.

AZZ must maintain a maximum consolidated leverage ratio of 3.25 times and a minimum consolidated fixed-charge coverage ratio of 1.75 times.

In addition, AZZ must not make capital expenditures of more than $60 million during the fiscal year ending Feb. 28, 2014 and $50 million during any fiscal year ending after that.

The company completed its acquisition of Aquilex Specialty Repair and Overhaul LLC for $250 million on March 29, using funds borrowed under the credit agreement.

AZZ is a Fort Worth, Texas-based specialty electrical equipment manufacturer.

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