NN, a diversified industrial company, amended its five-and-a-half-year, $150 million term loan with funds managed by Oaktree Capital Management. The amendment increases the maximum total leverage ratio covenants for all quarters of 2022 and 2023.
“We are pleased to complete this amendment with Oaktree, which allows us to remain focused on our operations and our strategic initiatives towards transformational growth,” Warren Veltman, president and CEO of NN, said. “The amendment provides us time and flexibility to continue to make the right long-term decisions for the business as we return to a normal operating environment. In 2022, we expect the unprecedented impacts of supply chain disruption for semiconductor chips and other key inputs as well as inflation that we have experienced in 2021 to stabilize. These developments, coupled with the pricing actions we have taken with customers to recover inflation is expected to result in improved profitability in 2022.”
The transaction increases the quarterly maximum leverage ratio in a range of 0.25x to 0.75x for 2022 and 2023 as specified in the amendment. The transaction also makes no change to the interest rate. “We engaged in proactive discussions with Oaktree to reset our leverage ratios at levels that provide us adequate flexibility given the uncertain and challenging macroeconomic conditions our business is facing,” Mike Felcher, senior vice president and CFO at NN, said. “We appreciate Oaktree’s continued support as an investment partner that understands our business and is committed to our long-term growth strategy.”