Bruker has closed a new five-year revolving credit facility with expanded capacity to borrow up to $600 million, and a new seven-year term loan in the aggregate principal amount of $300 million, together with cross-currency and interest rate swap arrangements.
The company also completed a new private placement of 10-year senior notes in the aggregate principal amount of 297 million Swiss Franc and new cross-currency swap arrangements on existing 2012 private placement notes of $205 million which fix rates to Euro and Swiss Franc rates.
This debt refinancing capitalizes on the low interest rate environment in domestic and European capital markets, effectively fixes interest rates on approximately 60% of the company’s total borrowing capacity and extends debt maturities out to 2026 and 2029.
According to a related 8-K filing, Bank of America served as administrative agent for the revolver and the term loan.
Deutsche Bank Securities and Wells Fargo Bank served as co-syndication agents. Citizens Bank, Credit Suisse, TD Bank, and U.S. Bank were co-documentation agents. Bank of America was also swing line lender and issuing bank.
Some details of the transaction are:
- The five-year revolving credit facility of up to $600 replaces the company’s $500 million five-year revolving credit facility established in October 2015, which has been terminated;
- The seven-year term loan in the aggregate principal amount of $300 million is on terms substantially similar to the terms of the 2019 revolving credit facility. Floating interest rates under the term loan were simultaneously fixed through cross-currency and interest rate swap arrangements into fixed Euro and Swiss Franc rates carrying an average effective interest rate of 0.94%;
- Private placement of 297 million Swiss Franc aggregate principal amount of 1.01% senior notes due December 11, 2029. Interest on the notes is payable semi-annually. The notes were issued and sold to a limited number of accredited institutional investors in an offering exempt from the registration requirements of the Securities Act of 1933, as amended.
- Cross-currency swaps were also executed on the company’s existing 2012 private placement notes of $105 million and $100 million carrying interest rates of 4.31% and 4.46% respectively, resulting in an average effective interest rate of 2.25% on these instruments.
Bruker intends to use proceeds from this financing for general corporate purposes, including the repayment of outstanding borrowings under the company’s prior 2015 revolving credit facility, and to support corporate strategic objectives.
Including the effect of swap arrangements and expected reinvestment, the net impact of these financing transactions is expected to be accretive to EPS in 2020 and beyond.
Bruker’s high-performance scientific instruments and high-value analytical and diagnostic solutions enable scientists to explore life and materials at molecular, cellular and microscopic levels.