Proceeds of the refinancing will repay the company’s existing loans with PNC Business Credit, retire all of our capital lease obligations, and be used for general working capital purposes.
Borrowings under both the revolving credit line and the term loan will bear an interest rate equal to 30-day LIBOR, plus 2.5% (with a floor of 3.5%). The current interest rate will be approximately 4.25%, a reduction of nearly 50% from the PNC rate is of 8.75%.
“This refinancing with Sterling National Bank is an important step in Air Industries return to profitability. It will reduce our interest expense and dramatically reduce principal amortization. On a pro-forma basis for the nine months ended September 30, 2019 this new credit facility would have saved us over $1.5 million in cash,” said Lou Melluzzo, CEO of Air Industries.
Air Industries Group is an integrated manufacturer of complex machined products including landing gear, flight control, and jet turbine components for aerospace and defense prime contractors.