Bank of America served as administrative agent, swingline lender and issuing bank on a five-year, $100 million revolving line of credit and a seven-year, $240 million term loan for Ducommun, replacing the company’s existing debt structure.
In connection with the transaction, Ducommun extinguished its existing $200 million revolving line of credit and its $275 million term loan, both of which mature in June 2020. The new revolving line of credit matures in November 2023 and the new term loan matures in November 2025.
The initial variable interest rate on the new revolving line of credit will be LIBOR plus 2.25%, subject to adjustments based on the Company’s leverage ratio, and the rate on the new term loan will be LIBOR plus 4.00%, amortizing 1% annually.
According to a related 8-K filing, the entirety of the senior secured term loan was drawn as of the closing date, while $16.5 million of the line of credit was drawn. The latter also includes a $25 million sublimit for the issuance of standby and commercial letters of credit and a $10 million swingline subfacility.
Ducommun used the proceeds of the borrowings to prepay all outstanding loans and accrued and unpaid interest under its previous credit agreement.
“This new credit facility will provide financial support through 2025,” said Stephen G. Oswald, Ducommun chairman, president and CEO. “Ducommun has made tremendous strides in the last two years positioning the Company for higher growth and improved operating performance. The refinancing of our debt allows for stability and flexibility as we continue to move forward building the business.”
Founded in 1849, Ducommun delivers innovative manufacturing solutions to customers in the aerospace, defense and industrial markets by focusing on two core areas – electronic systems and structural systems.
