Babcock & Wilcox Enterprises, a provider of energy and environmental products and services for power and industrial markets, entered into a new three-year senior secured credit agreement with Axos Bank under which Axos has provided an asset-based revolving credit facility of up to $150 million that can be used to support letters of credit, renewable energy growth initiatives and potential accretive business purposes.
The new revolver provides for reduced interest rates on letters of credit and greater flexibility, with overall use of up to $150 million versus the company’s previous facilities that were limited to a $50 million revolver and a separate letters of credit facility. The new financing agreements have a maturity date of Jan. 18, 2027.
All obligations under the company’s prior credit agreement with PNC Bank as administrative agent have been discharged, and the prior credit agreement has been terminated. Letters of credit issued under the previous facility with PNC are expected to transition to the Axos facility over the next several months. Babcock & Wilcox Enterprises expects to achieve annual interest cost savings of approximately $4 million under its new facility.
Babcock & Wilcox Enterprises also announced that the company and its senior unsecured notes received a reaffirmed credit rating of “BB+” from the Egan-Jones Ratings Company. The credit rating follows a comprehensive review and takes into consideration current market conditions.
“The closing of this new facility and reaffirmation of our credit rating are significant positive developments that bolster our efforts to support multi-year projects and capitalize on future growth through evolving BrightLoop and ClimateBright technology opportunities,” Kenneth Young, chairman and CEO of Babcock & Wilcox Enterprises, said. “These developments also demonstrate the confidence both Axos and Egan-Jones have in B&W’s business, not only today but also in the years ahead.
“With our recent strategy changes, we are confident in realizing stronger cash flows from our thermal operations as we continue to expand and implement our new renewable technologies, including hydrogen production and carbon capture. The reaffirmation of our credit rating and our new senior secured credit facility reflect the stability of our business model and our continued commitment to our long-term growth capabilities.”
