Federal Signal closes $800 million five-year replacement facility

By Marisa Wong

Los Angeles, Oct. 24 – Federal Signal Corp. completed a new $800 million five-year credit facility to replace its existing $500 million credit facility, according to a press release and an 8-K filing with the Securities and Exchange Commission.

The new facility, closed on Oct. 21, is comprised of a $675 million revolver and a $125 million term loan.

The maturity date is Oct. 21, 2027.

The arrangement also gives the company the ability to further expand its borrowing capacity by up to the greater of $400 million and 100% of consolidated EBITDA for the applicable four-quarter period preceding that expansion notice, subject to lender approval.

Interest is at SOFR plus 100 basis points to 175 bps. There is a commitment fee on the unused portion of the revolver from 10 bps to 25 bps.

Jennifer L. Sherman, the company’s president and chief executive officer, said in the release, “We are extremely pleased to announce this new credit facility, which provides greater financial flexibility to invest in internal growth initiatives and pursue additional acquisitions.

“The terms of the new facility are more favorable to the company, reflecting our strong cash flow and balance sheet. This marks another important milestone for the company, as we continue to execute on our strategic long-term growth objectives.”

Wells Fargo Securities, LLC, PNC Capital Markets LLC and Truist Securities, Inc. acted as joint lead arrangers and joint bookrunners, with PNC Bank, NA and Truist Bank as syndication agents and JPMorgan Chase Bank, NA and Toronto Dominion Bank, New York Branch as documentation agents. Wells Fargo Bank, NA will serve as administrative agent, swingline lender and issuing lender.

Proceeds may be used for working capital and general corporate purposes, including acquisitions.

Based in Oak Brook, Ill., Federal Signal is a designer and supplier of environmental and safety and security products for municipal, governmental, industrial and commercial customers.

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