ASV Holdings, a provider of rubber-tracked compact track loaders and wheeled skid steer loaders in the compact construction equipment market, replaced its former credit agreement with a new $50 million, five-year credit facility with PNC Bank as the lead lender.

The new agreement consists of a $35 million revolving credit facility and a $15 million term loan and provides for a significant reduction in annual interest costs, along with generally more favorable credit terms.

Missi How, CFO of ASV, commented, “Reducing our interest expense through the negotiation of lower rates with our banks marks another key milestone for our team here at ASV. Our financial performance and execution of our plan throughout 2017 enabled us to reduce our cost of capital and has put us in position to continue to prudently grow the enterprise. We expect that the new lower rate will result in an annual savings of nearly $800,000 in interest for 2018.”

The company expects to incur a charge in the fourth quarter of about $900,000, which reflects the remaining unamortized balance of costs associated with the previous credit facility, and a prepayment penalty at closing against the old credit facility. Principal payments of $500,000 against the term loan portion of the facility will be due each quarter.