Armstrong World Industries, a manufacture of floors and ceiling systems, announced plans to refinance its existing credit agreement in conjunction with and subject to the completion of the planned separation of the company’s flooring business.

Subject to final terms and conditions, the company anticipates achieving lower interest expense, longer maturities and several minor technical improvements and would intend to use cash on hand, as well as $50 million from a dividend from Armstrong Flooring (AFI) anticipated in connection with the separation, to reduce total debt outstanding.

The new credit agreement is expected to be for $1.05 billion and includes $200 million from an undrawn revolving credit facility. The company anticipates concluding the refinancing transaction contemporaneously with the completion of the separation transaction.

In a news release dated March 18, 2013, Armstrong announced it closed a new $1.275 billion senior secured credit a facility consisting of a $250 million revolving credit facility and a $575 million term loan A, both of which mature in March of 2018 and a $450 million term B which matures in March of 2020. The transaction was led by BofA Merrill Lynch, J.P. Morgan and Barclays.

Armstrong said the completion of the company’s proposed refinancing is subject to a number of factors, including market conditions and the company’s financial condition and results of operations. AFI’s ability to pay a dividend to the company similarly is subject to a number of factors, including the availability of funds for this purpose under applicable law.