Dover gets replacement $1 billion revolver, $500 million 364-day revolver

By Mary-Katherine Stinson

Lexington, Ky., April 11 – Dover Corp. on April 6 replaced a similar existing credit facility with a $1 billion five-year revolving credit facility and also signed a $500 million 364-day revolving credit agreement, both with a syndicate of 12 banks, according to an 8-K filing with the Securities and Exchange Commission.

The total commitments of the five-year agreement may be increased by an additional amount of up to $500 million during the term of the agreement.

Letters of credit are also available, subject to a $250 million subcap. The face amount of outstanding letters of credit and any unpaid drawing will reduce availability under the five-year agreement on a dollar-for-dollar basis. There is a letter-of-credit fee which will accrue at the benchmark rate for SOFR-based loans. No letter of credit may extend past five days prior to the maturity date for loans under the five-year agreement.

The currencies available under each of the agreements are the dollar, euro, sterling, Canadian dollar and kronor. The loans under each agreement will bear interest at a benchmark rate specified for each currency which is designated as SOFR for dollar-denominated loans, Sonia for sterling loans, Euribor for euros loans, CDOR for Canadian Dollar loans and Stibor for those in kronor.

In addition to the benchmark rate, an applicable margin will be added ranging from 80.5 basis points to 120 bps in the case of the five-year agreement, and from 82.5 bps to 125 bps in the case of the 364-day credit agreement, based on the credit rating given to the company’s senior debt by S&P Global Ratings and Moody’s Investors Service.

The company will also pay a facility fee with a rate ranging from 7 bps to 17.5 bps in the case of the five-year agreement and from 5 bps 12.5 bps in the case of the 364-day credit agreement.

The five-year agreement will mature on April 6, 2028.

The 364-day revolving credit agreement will terminate on April 4, 2024 with a one-year extension at the company’s option so long as certain conditions are met, also known as the term-out option. If the term-out option is utilized, the company will pay a term-out fee of 75 bps on the aggregate principal amount of the outstanding loans not repaid on April 4, 2024 under the 364-day agreement.

The company must maintain a minimum interest coverage ratio of EBITDA to consolidated net interest expense of not less than 3x.

As with the previous five-year agreement, JPMorgan Chase Bank, NA continues as the administrative agent.

JPMorgan Chase Bank, NA, BofA Securities, Inc., HSBC Bank USA, NA and ING Bank NV, Dublin Branch are the joint lead arrangers and bookrunners.

Bank of America, NA is the syndication agent.

HSBC Bank USA, NA and ING Bank NV, Dublin Branch are the co-documentation agents.

The five-year agreement is intended to be used primarily as liquidity backup for the company’s commercial paper program. Proceeds from the 364-day revolving credit agreement will be used for working capital and general corporate purposes, as well as debt repayment.

The five-year credit agreement replaced an existing $1 billion five-year credit facility dated as of Oct. 4, 2019 with JPMorgan Chase Bank, NA as administrative agent which had a remaining term of one year. The existing agreement was terminated upon the company’s entry into the new agreement.

Dover is a Downers Grove, Ill.-based manufacturer of industrial, engineering, fluid management and electronic technical components and equipment.

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