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Aecom revolving, term A loans’ interest cut to Libor plus 150-225 bps
By Wendy Van Sickle
Columbus, Ohio, Sept. 29 – Aecom’s Thursday credit agreement amendment includes the addition of a $185 million delayed-draw term loan A tranche and reduces the applicable margin above Libor for revolving and term A loans to 150 basis points to 225 bps, according to details from an 8-K filing with the Securities and Exchange Commission.
The pricing reduction is a 50 bps cut from previously existing rates, and the margin depends on leverage ratio. The commitment fees have also been reduced to a range of 20 bps to 35 bps.
The credit agreement consists of a term loan A facility, a term loan B and $1.05 billion revolving credit facility. Under the amendment, a $500 million incremental performance letter-of-credit facility was eliminated and a $500 million basket to enter into secured letters of credit outside the credit agreement was added.
The new term loan A tranche is expected to be used to pay off existing senior unsecured notes due in 2017.
The term A loans and the revolver now mature Sept. 29, 2021, extended from Oct. 17, 2019.
Bank of America Merrill Lynch, MUFG Union Bank, Bank of Nova Scotia, BNP Paribas Securities Corp. and J.P. Morgan Securities LLC are the bookrunners and joint lead arrangers. Bank of America is the administrative agent.
Aecom said in a news release that it expects its interest expense in fiscal 2017, excluding fees, will be reduced by about $10 million as a result of the transaction.
The company said the amendment will help it to execute its growth strategy.
Based in Los Angeles, Aecom designs, builds, finances and operates infrastructure assets for governments, businesses and organizations.
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