Chase Corporation, a global specialty chemicals company that manufactures protective materials for applications across market sectors, entered into a new amended and restated credit agreement with Bank of America as administrative agent and with participation from Wells Fargo Bank, PNC Bank and JPMorgan Chase Bank.
The new credit agreement was entered into to amend, restate and extend Chase’s preexisting credit facility, which was previously set to mature on Dec. 15, 2021. Moreover, the agreement provides for additional liquidity to finance acquisitions, working capital and capital expenditures and for other general corporate purposes. The new agreement increases the company’s borrowing capabilities to $200 million (up from $150 million under the old facility), with the ability to request an increase in this amount by an additional $100 million at the individual or collective option of any of the lenders (up from $50 million under the old facility).
“Under this new credit agreement, we obtained an increased revolving credit facility which will continue to position us with adequate debt capital and available cash to execute our inorganic growth plans,” Adam P. Chase, president and CEO of Chase Corporation, said. “In this competitive market, having immediate access to funds gives us an advantage in our acquisition program, putting us in the position to close transactions to fulfill our strategic initiatives. Working with our lenders, led by Bank of America, along with Wells Fargo, PNC and JPMorgan, we have established a great structure to meet our needs going forward.”
Similar to the previous agreement, the applicable interest rate for the new revolving facility and new term loan is based on the effective London Interbank Offered Rate (LIBOR) plus a range of 1% to 1.75%, depending on the consolidated net leverage ratio of Chase and its subsidiaries. The new credit agreement has a five-year term, with interest payments due at the end of the applicable LIBOR period (but in no event less frequently than the three-month anniversary of the commencement of such LIBOR period) and principal payment due at the expiration of the agreement on Jul. 27, 2026. The new credit agreement contains provisions that may replace LIBOR as the benchmark index under certain circumstances. In addition, Chase may elect a base rate option for all or a portion of the new revolving facility, in which case interest payments shall be due with respect to such portion of the new revolving facility on the last business day of each quarter.
“Timing in the credit market was favorable, so we accelerated our renewal process,” Michael J. Bourque, treasurer and CFO of Chase Corporation, said. “We may also elect to convert all or a portion of any balance outstanding on the new revolving facility into a new term loan twice during the term of the new revolving facility, giving us maximum flexibility with our debt structure going forward.”
