KeyBank acted as administrative agent and issuing lender on a $350 million syndicated credit facility, consisting of a $150 million term loan and a $200 million revolver, for Universal Logistics Holdings.
Universal expects the new credit facility to provide the requisite liquidity for it to continue its acquisition strategy, while streamlining its overall debt structure and reducing borrowing costs.
Certain proceeds advanced at closing under the new facility were used to repay certain existing indebtedness and to pay fees and expenses associated with the new financing.
“Closing this new credit facility is a significant milestone in Universal’s continued transformation,” said Jude Beres, Universal’s chief financial officer. “It gives us the flexibility and dry powder to make strategic acquisitions, expand our North American footprint, and clears a path for Universal’s continued success. I would like to say thank you to all our syndicate partners, advisors and Universal’s finance team for working so hard to get the job done.”
Borrowings under the revolver may be made until the maturity date on November 26, 2023. Proceeds from the term loan were advanced on November 27, 2018 and will mature on November 26, 2023.
The term loan will be repaid in consecutive quarterly installments, as defined in the credit agreement, commencing March 31, 2019, with the remaining balance due at maturity. At closing, the total outstanding balance under the new facility was approximately $186.6 million.
Borrowings under the facility generally bear interest at a LIBOR-based rate plus a margin ranging from 1.25% to 2.00%, depending on Universal’s then-existing leverage ratio. The applicable interest rate at closing was LIBOR plus 1.75%. The credit agreement also requires Universal to pay a quarterly fee of 0.25%, subject to adjustment based on Universal’s leverage ratio, multiplied by the amount of unused credit commitments.
Huntington National Bank joined KeyBank as joint lead arranger and joint book runner on the facility.
Dykema served as Universal’s legal advisors on the financing.
Universal Logistics Holdings is an asset-light provider of customized transportation and logistics solutions throughout the United States, Mexico, Canada and Colombia.
