PAE closed new senior secured credit facilities, consisting of a $740 million seven-year term loan, a seven-year $150 million delayed draw term loan and a $175 million five-year senior secured revolving credit facility maturing. The joint lead arrangers and joint bookrunners under the senior secured credit facilities are Bank of America Securities, Citizens Bank, Morgan Stanley Senior Funding, Stifel Nicolaus and Truist Securities.
“The new credit agreements will improve our free cash flow and debt maturity profile, which we can now deploy to fund our growth strategy, including acquiring, integrating and operating businesses in our sector to drive growth and margin expansion,” John Heller, president and CEO at PAE, said.
The loans under the credit agreements are secured by a first lien over substantially all of the company’s assets as well as affirmative and negative covenants customary for transactions of this type, including limitations with respect to indebtedness, liens, investments, dividends, disposition of assets, change in business and transactions with affiliates.
PAE used the proceeds from the new credit agreement to repay the amounts outstanding under its existing first lien and second lien term loan facilities, with the remaining amounts to be used for general corporate purposes, potential mergers and acquisitions, and transaction fees and expenses.
Morgan, Lewis & Bockius acted as legal counsel to PAE for the transaction and Cahill Gordon & Reindel acted as legal counsel to the joint lead arrangers and joint bookrunners.
PAE is an American defense and government services contractor.
