ABC Technologies, a manufacturer and supplier of technical plastics and light-weighting innovations to the global automotive industry, and its wholly-owned indirect subsidiaries, ABC Technologies, as borrowers, entered into a fifth amended and restated credit agreement with a syndicate of lenders, including The Bank of Nova Scotia (Scotiabank) as administrative agent, amending and restating the fourth amended and restated credit agreement dated Feb. 22, 2021, as amended.
The amendments in the credit agreement included, among other things: an increase in the size of the available credit facilities to $550 million from $450 million (inclusive of two swingline facilities in the aggregate amount of $23 million, a revolving facility in the amount of $477 million and a revolving B facility in the amount of $50 million); resetting the maturity date to Feb. 24, 2027 for the majority of the credit facilities except for the revolving B facility which is set to mature on Feb. 24, 2023; allowing for certain permitted acquisitions, including the previously announced acquisitions of dlhBowles and Karl Etzel; lowering applicable margin rates for advances under the credit agreement; and amending certain definitions, benchmarks and financial covenants. The amendments to the credit agreement provide ABC with increased liquidity at lower margin rates, providing increased flexibility for acquisitions and other capital expenditures in the medium and long-term. It is expected that, as a result of the amendments and restatement of the credit facilities, ABC will not draw on the previously announced bridge loans and will instead partially fund the acquisitions of dlhBowles and/or Karl Etzel through its existing credit facilities.
Borrowings under the credit facilities bear interest at short-term floating rates plus a fixed spread, which varies in accordance with the company’s total net debt to EBITDA ratio (as defined in the credit agreement). The credit facilities require the company to maintain certain financial covenants and contain other covenants that, subject to certain exceptions, restrict the ability of the company and its subsidiaries to create security interests, incur additional indebtedness or dispose of all or substantially all of its assets. As at the date hereof, the company is in compliance with all of its covenants under the credit agreement.
All obligations under the credit agreement are unconditionally guaranteed by a majority of the wholly-owned subsidiaries of the company. The credit agreement and guarantees are secured by a charge over all the property and assets of the borrowers and the guarantors.
