Daily News: August 26, 2013

J.P. Morgan, BMO Capital Amend American Capital Term Loan

American Capital announced that it has amended its $600 million senior secured term loan credit facility, which had $450 million in loans outstanding as of the closing date following a recent scheduled amortization payment. J.P. Morgan Securities and BMO Capital Markets were joint lead arrangers and bookrunners on the transaction.

The amendment modifies the credit agreement to, among other things:

  • Reduce the interest rate from LIBOR plus 4.25% to LIBOR plus 3.00%;
  • Reduce the LIBOR floor from 1.25% to 1.00%;
  • Reduce scheduled amortization from $150 million per year to $4.5 million per year;
  • Eliminate the excess cash flow sweep when the Company’s borrowing base coverage exceeds 150%; and
  • Increase the advance rates for collateral when calculating the borrowing base.
  • “We are pleased to have successfully amended our term loan credit facility to significantly lower our borrowing costs,” said Tom McHale, Senior Vice President, Finance. “We enjoyed strong demand and continued to receive the support of an excellent roster of debt investors.”

    “On August 7, 2013 Standard & Poor’s Rating Services raised our counterparty credit and senior secured debt ratings to BB- from B+ with a stable outlook,” said Michael Sarner, senior vice president, Treasury. “This upgrade is a testament to our strong performance in growing cash flows and will provide us with increased financial flexibility to continue to grow the company and create value for shareholders.”

    American Capital is a private equity firm and global asset manager.