Invacare gets $100 million ABL revolver due 2018 at Libor plus 275 bps

By Angela McDaniels

Tacoma, Wash., Jan. 16 – Invacare Corp. established a new $100 million asset-based lending senior secured credit revolving credit, letter-of-credit and swingline loan facility due January 2018 on Friday, according to an 8-K filing with the Securities and Exchange Commission.

The preliminary borrowing base is about $76 million. The borrowing availability is determined based on, among other things, the value of the company’s eligible accounts receivable, inventory, machinery and equipment assets in the United States and Canada.

Up to $25 million of the revolver is available for letters of credit, which amount is subject to an initial $10 million sublimit.

The revolver has a $25 million accordion feature.

The initial interest rate is Libor plus 275 basis points. The margin over Libor ranges from 225 bps to 275 bps and is based on usage.

Borrowings are subject to commitment fees of 25 bps or 37.5 bps per year, depending on utilization.

The revolver is secured by substantially all of the company’s domestic and Canadian assets other than real estate.

PNC Bank, NA, JPMorgan Chase Bank, NA, KeyBank NA and Citizens Bank, NA are the lenders. PNC is the administrative agent.

The proceeds of the Credit Facility were used to repay and terminate the company’s senior secured credit facility due October 2015, which had about $17 million of borrowings outstanding.

Unlike the old credit facility, the new credit facility does not have maximum leverage ratio or minimum interest coverage ratio covenants. The new credit facility does, however, contain a covenant requiring the company to maintain undrawn availability of not less than (a) 11.25% of the maximum amount that may be drawn under the credit facility for five consecutive business days or (b) $10 million.

Elyria, Ohio-based Invacare manufactures and distributes home and long-term care medical products.

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