Varian Medical enters into $300 million revolving credit facility

By Jennifer Chiou

New York, April 27 - Varian Medical Systems, Inc. terminated its existing revolver and entered into a $300 million credit agreement with Bank of America, NA as administrative agent, swingline lender and letter-of-credit issuer, according to an 8-K filed with the Securities and Exchange Commission.

The prior $300 million revolver is dated Nov. 10, 2008, and Varian said that it repaid in full the $100 million that was outstanding.

The new facility includes a $50 million subfacility for the issuance of letters of credit and permits swingline loans of up to $25 million.

In addition, the company may make up to three requests to increase the aggregate commitments by up to $200 million.

Varian borrowed $175 million under the credit facility on the effective date.

The new revolver will expire on April 27, 2017.

Borrowings will bear interest at Libor plus 125 basis points to 150 bps based on leverage.

There is a commitment fee of 25 bps to 50 bps based on the same leverage ratio.

The filing stated that as of April 27, the only subsidiary for which a stock pledge is required is Varian Medical Systems Nederland Holdings BV. The company has pledged 65% of the voting shares that it holds in that subsidiary.

Proceeds will be used for working capital, capital expenditures, permitted company share repurchases, permitted acquisitions and other corporate purposes.

Varian Medical is a Palo Alto, Calif.-based manufacturer of medical equipment.

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