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SPX Flow eases leverage ratio allowed under loan terms for two years
By Susanna Moon
Chicago, Dec. 16 – SPX Flow, Inc. amended its credit agreement for covenant relief on Friday with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.
The amendment provides covenant relief through Dec. 31, 2018 with an early termination option if consolidated leverage ratio is at or below 3.25 times and the interest coverage ratio is at least 3.5 times.
During the covenant relief period, the maximum consolidated leverage ratio will be increased to 4.75 times from 4 times for the fiscal quarters ending Dec. 31, 2017 and March 31, 2018, stepping down to 4.25 times for the fiscal quarters ending June 30, 2018 and Sept. 30, 2018 and to 4 times for the fiscal quarter ending Dec. 31, 2018.
Also during that period, the minimum interest coverage ratio was reduced to 3 times from 3.5 times through the fiscal quarter ending March 31, 2018 and then stepping up to 3.25 times for the fiscal quarters ending June 30, 2018 and Sept. 30, 2018 and to 3.5 times for the fiscal quarter ending Dec. 31, 2018.
In return, the company agreed to increased pricing of Libor plus 175 basis points to 275 bps, based on leverage during the covenant relief period. At any other time, interest on the loans is Libor plus 125 bps to 225 bps, based on leverage.
The company also is required to maintain a maximum consolidated secured leverage ratio of 2.5 times during that time.
Deutsche Bank AG Deutschlandgeschaft Branch is the foreign trade facility agent.
SPX is a Charlotte, N.C.-based company that supplies flow components, process equipment and turn-key systems.
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