Carpenter Technology details $500 million five-year revolver

By Marisa Wong

Madison, Wis., July 1 - Carpenter Technology Corp. disclosed details of its new $500 million syndicated credit facility due June 28, 2018 in an 8-K filed Monday with the Securities and Exchange Commission.

Carpenter Technology entered into the five-year revolver on June 28 with Bank of America, NA as administrative agent, swingline lender and letter-of-credit issuer; Merrill Lynch, Pierce, Fenner & Smith Inc. and J.P. Morgan Securities LLC as joint lead arrangers and joint bookrunners; JPMorgan Chase Bank, NA as syndication agent; and PNC Bank, NA, Bank Of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Sovereign Bank as documentation agents. The lender syndicate includes 10 lenders, as noted before.

The new revolver replaces the company's $350 million revolver dated June 21, 2011, which was set to expire on June 21, 2016. The prior facility was terminated upon closing of the new credit agreement.

The company can request to increase commitments under the new revolver to $700 million.

Interest is equal to Libor plus 75 basis points to 190 bps, depending on the company's senior long-term debt rating. There is a commitment fee of 7.5 bps to 37.5 bps, also based on the debt rating.

According to a June 28 press release, pricing was improved. The prior 20-bps facility fee was replaced with a commitment fee of 15 bps, contributing to a reduction in the all-in drawn fee by 15 bps at the current rating level.

In addition to some restrictive covenants, the new credit agreement contains financial covenants requiring the company to maintain a minimum interest coverage ratio of 3.5 to 1 and a debt to capital ratio of no more than 55%.

The new facility was substantially oversubscribed prior to allocations, according to the prior press release.

Based in Wyomissing, Pa., Carpenter produces and distributes specialty alloys and various engineered products.

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