Kaydon hopes to obtain new loan after repaying and terminating existing facility

By Sara Rosenberg

New York, May 20 - Kaydon Corp. plans to enter into negotiations with banks regarding a new credit agreement following repayment and termination of its existing bank debt.

The company sold $170 million of 4% contingent convertible senior subordinated notes due 2023 on Tuesday and plans to use proceeds to repay $72 million of revolving credit debt, to put up $3 million to cash collateralize outstanding bank letters of credit, to repurchase shares of its common stock including shares sold short by purchasers of the convertibles and for future acquisitions and general corporate purposes.

The anticipated cash and cash equivalents of approximately $197 million after the convertible offering and before the $30 million greenshoe are sufficient to fund the company's current operations and anticipated growth pending completion of a new credit agreement, according to a news release.

Kaydon is an Ann Arbor, Mich. designer and manufacturer of custom-engineered products.

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