Citizens Bank closed a new $42.5 million senior credit agreement with advanced manufacturing and 3D printing provider ARC Group Worldwide.

The financing will be used to support the expansion of ARC’s precision manufacturing and metal 3D printing businesses as well as to repay outstanding amounts under the company’s previous $30.4 million senior credit facility.

“Our new senior credit facility provides a solid foundation for the company’s continued growth, as well as simplifies our capital structure. Notably, the asset-based facility effectively mortgages the company’s real estate assets. We initially evaluated a sale leaseback of the U.S. properties we own, which includes our 125,000+ square foot advanced manufacturing campus in Colorado,” ARC CFO Drew M. Kelley said. “While we received several attractive offers for our properties, we were instead able to secure through the senior credit facility a $17.5 million, 20-year amortizing mortgage-based term loan at LIBOR + 3.50%. This offered us greater net proceeds than the after-tax amount of a sale leaseback, and an interest cost of less than half of the indicated sale leaseback cap rates.”

According to Kelley, the balance of the refinancing is a five-year, $25 million revolving commitment, of which $13.6 million was drawn at closing. The new asset-based revolver is interest only, set at LIBOR + 2.25%-2.75%.

“We are very happy to be able to help the ARC team achieve their strategic and financial goals, and we look forward to continuing our partnership with them as they grow,” said Lisa Maass, Connecticut president of Citizens Bank.