Mac-Gray Corporation, a provider of laundry facilities management services to multi-family housing, announced the signing of an amended five-year, $250 million senior credit facility. The transaction extends the maturity date by 14 months to May 2018 and reduces the company’s borrowing spread, based on its current leverage ratio, by 75 basis points.
According to an 8-K filing, Bank of America is the administrative agent for the lender group.
As a result of the transaction, the Company expects to generate approximately $700,000 in interest expense savings in 2013 and approximately $5 million over the life of the facility, depending on utilization.
“This amended facility increases our financial flexibility and highlights our success in continuing to strengthen the Company by improving earnings, generating free cash flow and reducing our leverage ratio,” said Stewart G. MacDonald, Mac-Gray’s chief executive officer. “Strong free cash flow has enabled us to reduce funded debt by more than $130 million since 2008, while reducing our leverage ratio from 3.8 times EBITDA to 2.8 times EBITDA at the end of the first quarter of this year. The transaction announced today reflects the confidence of our supportive bank group, led by Bank of America Merrill Lynch, which is committed to partnering with Mac-Gray.”
Mac-Gray derives its revenue principally through the contracting of debit card- and coin-operated laundry facilities in multi-unit housing facilities such as apartment buildings, college and university residence halls, condominiums and public housing complexes.