Pivot Technology Solutions announced it has entered into a $200 million senior secured asset-based revolving credit facility agreement with a group of lenders represented by JP Morgan Chase, as agent.
Pivot said the new facility replaces the company’s current facility, with PNC Bank, as agent. The proceeds from the facility will serve to fund general working capital of Pivot and its operating companies, and repay the outstanding balances of both its existing term loan and current revolving credit loan facilities with PNC.
No penalties are due on redeeming the revolving credit loan facility, while a 1% fee is payable on the remaining principal ($5.75 million) of the term loan.
The new credit facility allows the company to borrow up to $200 million, with the exact amount available based on eligible accounts receivable and inventory at any time. The facility has been underwritten by a syndicate of lenders led by JPMC and initially includes Bank of America.
“In replacing the existing facility, we achieve a number of benefits such as lower interest expense, greater liquidity, and additional flexibility in the use of funds drawn down,” stated Kerri Brass, CFO of Pivot. “For instance, the new facility allows us to draw down funds for financing international sales, an area we have targeted for growth. The new facility also makes provision to scale up at our discretion in support of overall growth in the business.”
The loans under the new credit facility bear interest at a rate based on LIBOR or Canadian Prime Rate plus the applicable margin, which shall vary between 150 bps and 175 bps, or 0 bps and 25bps, respectively, depending on excess availability from time to time. The new credit facility will mature on September 21, 2020.
The new credit facility may be increased by a maximum aggregate amount of $75 million by obtaining additional commitments from one or more lenders, without additional approval from other lenders, during the term of the agreement provided there is no default or event of default at such time.