Evoqua Water Technologies, a provider of water treatment solutions, refinanced its credit facilities, as wholly-owned subsidiaries of the company entered into a credit agreement that provides for a $475 million term loan, maturing on April 1, 2028, and a revolving credit facility of up to $350 million, maturing on April 1, 2026. The subsidiaries also entered into a receivables financing agreement that provides for a receivables finance facility of up to $150 million, maturing on April 1, 2024.
JP Morgan Chase Bank is serving as the administrative agent and collateral agent under the credit agreement. PNC Bank is serving as the administrative agent under the receivables financing agreement.
Evoqua Water Technologies will use the net proceeds of these facilities, together with cash on hand, to repay all outstanding indebtedness under the company’s previous credit facilities, in an aggregate principal amount of approximately $815 million. The reduction of approximately $340 million to the first lien term loan outstanding under the previous credit facilities was funded by draws on the new revolving credit facility, the new receivables finance facility and $100 million of cash on hand.
In addition to extending the maturities of the previous term loan and revolver, Evoqua Water Technologies reduced the weighted average cash borrowing cost by approximately 0.5% from the Dec. 31, 2020, level. Liquidity also improved as a result of the overall financing.
“We are very pleased to have the new credit facilities in place, which provides attractive market rates and extended maturities,” Ron Keating, CEO of Evoqua Water Technologies, said. “This new structure allowed us to reduce total debt while increasing liquidity and provides flexibility for continued investments in our organic and inorganic growth strategies. We appreciate the continued support from the high-quality financial institutions who participated in the underwriting.”
