According to an 8K filled with the SEC, Manufacturers and Traders Trust Company served as administrative agent on an amendment to Integer Holdings’ senior secured credit facility. The amendment was completed as a precautionary step during the COVID-19 pandemic.
“This covenant amendment enhances our ability to continue investing to execute our strategy throughout the pandemic through continued bolt-on acquisitions and the execution of our operational strategic imperatives,” Jason Garland, EVP and CFO of Integer, said. “We appreciate the broad support of our senior lenders and the confidence they have shown in our business strategy.”
Integer expects to maintain compliance with its covenant net leverage ratio and requested a covenant modification as a precautionary measure to provide additional cushion to allow for continued bolt-on M&A activity and protect against a prolonged pandemic. The net leverage ratio was increased from the existing ratio of 4.00 to 1.00 to 4.75 to 1.00 for the period beginning with fiscal Q3/20 through fiscal Q1/21. In fiscal Q3/21, the covenant steps down to 4.50 to 1.00 for one quarter until it reverts to the existing ratio through maturity. Additionally, Integer added a common credit facility feature, where its net leverage ratio can be increased by 0.50 for up to four consecutive quarters commencing in any fiscal quarter in which Integer consummates an acquisition with a $40 million or greater purchase price.
In connection with the amendment, Integer agreed to pay each consenting lender an advanced amendment fee of 0.1% of the borrowing capacity on the revolver and term loan A on the amendment effective date. It also will pay the consenting lenders a deferred amendment fee, payable in installments of 0.03125% of the outstanding revolver and term loan A each quarter through maturity, for any quarter Integer’s covenant net leverage ratio equals or exceeds 3.00 to 1.00.
Integer is a medical device outsource manufacturer serving the cardiac, neuromodulation, vascular, portable medical, advanced surgical and orthopedics markets.
