BofA, Wells Arrange Polypore $650MM Credit Agreement
Polypore International announced that it entered into a new, senior secured credit agreement led by Bank of America Merrill Lynch and Wells Fargo Securities, as joint lead arrangers and joint book managers. The $650 million senior secured credit agreement consists of a $500 million amortizing term loan facility and $150 million revolving credit facility which mature on April 8, 2019.
The company intends to use borrowings under the new term loan and revolving credit facility in conjunction with cash on hand to repay all outstanding obligations under the existing senior secured credit agreement and for redemption of its $365 million callable 7.5% senior notes (CUSIP 73179VAF0), resulting in a lower overall level of debt.
The redemption of the 7.5% senior notes, lower interest rates under the new credit agreement and a reduced level of total debt are expected to materially reduce interest expense after the transactions are completed, which we expect to occur in the second quarter of 2014. On a pro forma basis for the transactions as though they occurred on January 1, 2014, annualized interest expense would be in a range of approximately $15 million to $20 million, excluding one-time items related to the transactions and depending on variables such as market interest rates, hedging strategies and average revolver borrowings. In 2013, Polypore recorded total GAAP interest expense of $39.5 million.
Lynn K. Amos, CFO, treasurer and secretary said, “We are pleased with the terms of this new commitment from a core group of lenders who understand the growth potential and consistent cash generation capability of our business. This refinancing reinforces our strong financial foundation and enables us to substantially lower interest costs, while providing flexibility to pursue growth and value creation opportunities as we continue to accumulate cash.”
Polypore International is a global high technology filtration company specializing in microporous membranes.