Integer Holdings, a medical device outsource manufacturer, raised $1 billion in senior secured credit facilities to refinance its existing debt. The new facilities consist of a five-year, $400 million revolving credit facility; a five-year, $250 million term loan A; and a seven-year, $350 million term loan B. The transaction reduces overall borrowing costs, extends tenor, resets financial covenants to enhance operating flexibility and increases liquidity through a higher level of revolver capacity.
Wells Fargo Bank is acting as administrative agent, swingline lender and issuing lender for the facilities, while Wells Fargo Securities, BofA Securities, Fifth Third Bank, Keybanc Capital Markets, Citigroup Global Markets and Santander Bank acted as joint lead arrangers and joint bookrunners.
Facility Highlights
- This debt refinancing is expected to improve Integer’s future annualized diluted earnings per share by approximately $0.15 based on current outstanding debt and interest rates
- Nearest debt maturity extended by four years from 2022 to 2026
- Improved key credit documentation terms that provide flexibility for ongoing operating and strategic initiatives
- Liquidity (cash plus revolver availability) increased by approximately $120 million
- In conjunction with this transaction, both Moody’s & S&P upgraded Integer’s corporate family and senior secured ratings to Ba3/BB- (each with stable outlooks)
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“Our new credit facilities are consistent with the execution of our disciplined capital structure strategy,” Jason Garland, executive vice president and CFO at Integer, said. “We were able to lower our borrowing cost and create incremental flexibility to invest in Integer’s growth plans. As we invest, our target to maintain net total debt to adjusted EBITDA leverage in the range of 2.5 to 3.5 times remains unchanged. We appreciate the strong support of our lenders in completing these new facilities.”
