Graham Corporation entered into a credit agreement with JPMorgan Chase, as administrative agent for the lenders and J.P. Morgan Securities, as sole bookrunner and sole lead arranger.

The new credit agreement provides the company with a $25 million revolving credit facility, with no sublimits on either the issuance of letters of credit or bank guarantees by the company or its subsidiaries.

The new credit agreement has a five-year term and is expandable at the company’s option at any time to up to $50 million. It will support Graham’s anticipated working capital and letter of credit requirements as well as its strategic growth objectives.

The new credit agreement replaces in its entirety that certain loan agreement dated December 3, 2010 between the company and Bank of America, which has been terminated.

At the company’s option, amounts outstanding under the new credit agreement will bear interest at rate equal to either (i) the bank’s prime rate or (ii) LIBOR plus a margin. The margin will be based upon the ratio of the company’s funded indebtedness to EBITDA and may range from 2.00% to 1.00%. Amounts available for borrowing under the new credit agreement are subject to an unused commitment fee of between 0.375% to 0.200%, depending on the above ratio.