Actuant gets $400 million revolver, $200 million term loan due 2024

By Sarah Lizee

Olympia, Wash., April 2 – Actuant Corp. entered into a credit agreement on Friday with JPMorgan Chase Bank, NA as administrative agent, providing for a $400 million revolving credit facility and a $200 million term loan, according to an 8-K filing with the Securities and Exchange Commission.

JPMorgan, Wells Fargo Securities, LLC, Bank of America, NA, SunTrust Robinson Humphrey, Inc. and PNC Capital Markets LLC are joint lead arrangers and joint bookrunners.

Wells Fargo Bank, NA, Bank of America, SunTrust Bank and PNC Bank, NA are co-syndication agents and BMO Harris Bank, NA is the documentation agent.

Borrowings initially bear interest at Libor plus 162.5 basis points. The margin over Libor is based on the company’s net leverage ratio, ranging from 112.5 bps to 200 bps.

In addition, a non-use fee is payable quarterly on the average unused revolver ranging from 15 bps to 30 bps per annum, also based on the company’s net leverage ratio.

The revolver has a sublimit of $200 million for borrowings denominated in euros, pounds sterling or other mutually acceptable foreign currencies.

The credit agreement also provides for a $300 million expansion option, which may be increased by up to an additional $200 million to the extent of any repayment of the term loan, which may be exercised by the company subject to some conditions.

Borrowings under both the revolver and the term loan will mature on March 29, 2024.

Borrowings are secured by substantially all personal property assets of the company and its domestic subsidiary guarantors, other than some specified excluded assets, and some equity interests owned by the foreign law pledgors.

The term loan is required to be repaid in principal installments of $1.25 million per quarter beginning on Aug. 31, increasing to $2.5 million per quarter beginning on May 31, 2020, increasing to $3.75 million per quarter beginning on May 31, 2021, and increasing to $5 million per quarter beginning on May 31, 2022, with the remaining balance due at maturity.

The two financial covenants included are a maximum net leverage ratio of 3.75 to 1.00 and a minimum interest coverage ratio of 3.50 to 1.00, in each case subject to adjustment in connection with some transactions, including reduction of the minimum interest coverage ratio to 3.00 to 1.00 for any fiscal quarter ending within 12 months after the sale of the engineered components systems business.

In connection with its entry into the new credit agreement, on Friday the company terminated and repaid all debt outstanding under the fifth amended and restated credit agreement dated May 8, 2015 with as agent. The prior credit agreement provided for a $300 million revolver and a $300 million term loan. Borrowings under the prior credit facility were scheduled to fully mature on May 8, 2020.

Actuant is a Menomonee Falls, Wis.-based diversified industrial company that manufactures branded hydraulic tools, specialized products and services for energy markets and highly engineered position- and motion-control systems.

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