KEMET, a global supplier of passive electronic components, has entered into a new $345 million term loan credit facility. The proceeds are being used, together with cash on hand, to fund the redemption of all of KEMET’s outstanding 10.5% senior notes due 2018, which were also called for redemption.

The new term loan credit facility provides KEMET with lower annual cash interest expenses, resulting in interest expense savings of approximately $13 million annually, and provides additional operational flexibility to support its long-term growth objectives. The term loans were sold at 97 and will bear interest at KEMET’s option at the Base Rate + 500 bps or LIBOR + 600 bps (with a 100 bps LIBOR floor), and reflect a current corporate rating of B3/B. The term loans mature April 28, 2024.

In connection with the closing of the new term loan credit facility, KEMET also entered into a new amendment to its revolving credit facility. The new amendment to the revolving credit facility provides KEMET with lower pricing and the ability to complete the refinancing. As part of the overall refinancing, KEMET also repaid all amounts outstanding under the revolving credit facility.

“We are pleased to bring this refinancing to completion in such a positive manner. This refinancing gives us significant annual cash interest expense savings, and also provides us with the financial and operating flexibility to achieve our long-term growth objectives,” said Per Loof, the company’s CEO. “This refinancing of our existing debt at improved interest rates and with lower cash interest expense will provide additional earnings per share for our shareholders.”

According to a related 8-K filing, Bank of America served as administrative agent for the transaction. Merrill Lynch served as sole lead arranger and bookrunner for the term loan.

Jenner & Block acted as the company’s legal counsel. Cahill Gordon & Reindel acted as legal counsel to the sole lead arranger.