Orbital ATK obtains five-year $1.8 billion secured credit facility

By Wendy Van Sickle

Columbus, Ohio, Sept. 29 – Orbital ATK, Inc. entered into a new five-year $1.8 billion senior secured credit facility, consisting of an $800 million term loan A and a $1 billion revolving line of credit, on Tuesday, according to an 8-K filed with the Securities and Exchange Commission.

Orbital said it used proceeds from initial borrowings under the new facility, along with proceeds of the sale of $400 million of senior notes, to repay and terminate its prior secured credit facilities.

The previous facility had a $700 million revolving credit limit.

Wells Fargo Securities, LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Inc., J.P. Morgan Securities LLC, U.S. Bank, NA, the Bank of Tokyo-Mitsubishi UFJ, Ltd. and SunTrust Robinson Humphrey, Inc. acted as joint lead arrangers and joint bookrunners.

Wells Fargo Bank, NA is the administrative agent; Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith and J.P. Morgan Securities LLC the co-syndication agents; and U.S. Bank, NA, the Bank of Tokyo-Mitsubishi UFJ and SunTrust Bank the co-documentation agents.

The new facility has initial interest of Libor plus 150 basis points, down from Libor plus 200 bps under the previous facility. The new facility’s interest can range from Libor plus 125 bps to 200 bps, depending on leverage ratio.

The revolver has a commitment fee ranging from 20 bps to 35 bps.

The new revolver has a $400 million standby loan sublimit and a $75 million sublimit for swingline loans.

The new facility matures Sept. 29, 2020. The company has the option to increase revolving and term loan borrowings up to the greater of $750 million or an amount such that the consolidated senior secured leverage ratio of the company would not be greater than 2.5 to 1.

The company said it may use available capacity under the new facility for working capital and other general corporate purposes.

Orbital ATK is a Dulles, Va.-based designer, builder and provider of space, defense and aviation systems.

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