Bruker completes debt financing, including $800 million of new loans

By Marisa Wong

Los Angeles, Dec. 12 – Bruker Corp. announced it completed some debt financing actions, including a new revolving credit facility, a new term loan and a private placement of new senior notes.

Specifically, the company entered into an up to $600 million revolving credit facility that replaces its $500 million five-year revolver established in October 2015, which has been terminated, and a $300 million seven-year term loan on terms substantially similar to those of the new revolver.

Floating interest rates under the term loan were simultaneously fixed through cross-currency and interest rate swap arrangements into fixed euro and Swiss franc rates carrying an average effective interest rate of 0.94%, according to a press release.

In addition, the company placed CHF 297 million of 1.01% senior notes due Dec. 11, 2029 through a private placement to a limited number of accredited institutional investors.

The company also carried out cross-currency swaps on its existing 2012 private placement notes of $105 million and $100 million carrying interest rates of 4.31% and 4.46%, respectively, resulting in an average effective interest rate of 2.25% on these instruments.

This debt refinancing capitalizes on the low interest rate environment in domestic and European capital markets, effectively fixes interest rates on roughly 60% of the company’s total borrowing capacity and extends debt maturities out to 2026 and 2029, according to the release.

Bruker said it intends to use proceeds from this financing for general corporate purposes, including the repayment of outstanding borrowings under its prior 2015 revolver, and to support corporate strategic objectives.

Revolving facility

Bruker entered into the revolving credit agreement on Dec. 11 with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

BofA Securities, Inc., Deutsche Bank Securities Inc. and Wells Fargo Securities, LLC acted as joint bookrunners and joint lead arrangers. Deutsche Bank Securities and Wells Fargo Bank, NA were co-syndication agents.

The revolver is comprised of sub-facilities for revolving loans, swingline loans, letters of credit and foreign borrowings.

The credit agreement also provides for an uncommitted incremental facility that allows the company to increase the amount of the revolver or incur term loans in an aggregate amount of up to $250 million.

The facility matures on Dec. 11, 2024.

Amounts bear interest Libor plus a margin ranging from 100 basis points to 150 bps, based on the company leverage ratio.

The company has also agreed to pay a quarterly facility fee ranging from 10 bps to 20 bps, depending on the leverage ratio.

The credit agreement contains financial covenants including a maximum leverage ratio and minimum interest coverage ratios.

Term loan

Bruker entered into the term loan agreement on Dec. 11 with TD Bank, NA and other banks as lenders, according to the 8-K filing.

Bank of America is administrative agent.

The term loan matures on Dec. 11, 2026, is subject to scheduled amortization beginning in 2022 and may be prepaid in whole or in part without premium or penalty.

Borrowings bear interest at Libor plus a margin ranging from 100 bps to 150 bps, based on the company’s leverage ratio.

The other terms of the term loan are substantially similar to the terms of the revolving credit agreement, including the financial covenants.

Senior notes

Bruker also entered into the note purchase agreement on Dec. 11.

The CHF 297 million of 1.01% senior notes due Dec. 11, 2029 are guaranteed by some of the company’s subsidiaries.

The company may prepay at a make-whole price some or all of the notes at any time in an amount not less than 10% of the aggregate principal amount of the notes then outstanding.

The company may be required to prepay the notes at par in the event of a change of control.

In addition, the note purchase agreement requires that the company not permit its leverage ratio as of the end of any fiscal quarter to exceed 3.50 to 1.00, unless a material acquisition causes an adjusted leverage ratio to apply; its interest coverage ratio as of the end of any fiscal quarter for any period of four consecutive fiscal quarters to be less than 2.50 to 1.00; or priority debt at any time to exceed 15% of consolidated total assets.

Bruker is a manufacturer of scientific instruments based in Billerica, Mass.

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