CVG entered into an amendment to increase its existing senior secured credit facilities to $325 million from $275 million. The increased facilities consist of a $175 million term loan A and a $150 million revolving credit facility. The amendment provides the company with additional capital flexibility to execute upon its transformation and growth initiatives.
According to an 8K filed with the SEC, Bank of America is the administrative agent for the facilities.
“The successful completion of our amended credit facilities provides an additional $50 million of liquidity offering the company further flexibility to execute our business transformation and strategic growth initiatives,” Chris Bohnert, chief financial officer at CVG, said. “In addition to the increase in capital, we negotiated a more accommodative interest rate to include a reduction of 50 bps leading to annual interest expense savings of approximately $1 million, depending on total borrowings. We appreciate the confidence that our banking group has in our management team’s ability to execute upon our strategy.”
As part of the amended terms of the agreement, the maturity date of the senior secured credit facilities has been extended by twelve months to May 12, 2027, the interest rate will decrease by 50 bps at various leverage ratios based on SOFR, and pro-forma leverage will increase from the current 3.25x to 3.75x until Dec. 31, 2022 with a quarterly step down of 25 bps to 3.00x leverage by Sept. 30, 2023 and remain at this level thereafter. Further, separate from the company’s annual $35 million cap, a one-time $45 million capital project basket was included in the amendment. All other key provisions, including the $75 million accordion, acquisition holiday and other baskets remain unchanged.
