WillScot, a company in innovative temporary space solutions, has amended its asset-based lending credit facility to reduce borrowing costs and extend the maturity date to Oct. 16, 2030.
“We are pleased to announce the execution of the seventh amendment to our ABL credit agreement, extending our maturity profile and reinforcing our strong liquidity position,” Matt Jacobsen, chief financial officer of WillScot, said. “By right-sizing the credit facility to $3 billion and expanding our accordion feature, we maintain significant capacity for growth, while taking advantage of the favorable credit environment. We anticipate meaningful annual cash interest expense savings of approximately $5 million at current borrowing levels with opportunities to further reduce our interest cost, reflecting our ongoing commitment to prudent financial stewardship and capital discipline. I want to thank our lending partners, both those who have supported WillScot for over a decade and those who are new to the facility, for providing commitments aggregating to $4 billion before the accordion feature and for their ongoing support.”
Under the new terms of the amended ABL revolver, interest rate spreads above the Term SOFR- and Term CORRA-based rates lower to no more than 137.5 basis points (“bps”), and the spreads above the base rate and Canadian prime rate shall be reduced to no more than 37.5 bps. Additionally, interest rate adjustments to the reference rates of 10 bps have been removed, effectively bringing current Term SOFR- and Term CORRA-based rate spreads inclusive of the interest rate adjustments from 160 bps previously, to 137.5 bps, an initial savings of 22.5 bps.
The amended ABL revolver also provides for an additional step down in interest rate spreads of 12.5 bps to 125 bps after Sept. 30, 2026, if average availability in excess of 50% is achieved and maintained. Thereafter, if average availability in excess of 50% is maintained and net leverage is less than 3.0x, the interest rate spread reduces by an additional 12.5 bps to 112.5 bps.
Additional savings will be achieved by reducing the aggregate principal amount of the credit facility from $3.7 billion to $3 billion, which will reduce undrawn line fees, while the accordion feature increases from $750 million to $1 billion. As of transaction close, the company had available borrowing capacity of approximately $1.4 billion under the amended ABL revolver.
The amended ABL revolver is comprised of a syndicate of financial institutions. Bank of America is the administrative agent and collateral agent. BofA Securities, JPMorgan Chase Bank, PNC Capital Markets and Wells Fargo Bank acted as joint lead arrangers and joint bookrunners. M&T Bank, MUFG Bank and ING Capital acted as joint bookrunners.
