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Flowserve amends credit facility to provide for greater flexibility
By Sarah Lizee
Olympia, Wash., Sept. 8 – Flowserve Corp. amended its credit agreement with Bank of America, NA as administrative agent on Friday to provide for greater flexibility, according to an 8-K filing with the Securities and Exchange Commission.
The company said it proactively entered into the amendment to provide greater flexibility in maintaining adequate liquidity in the event that the need to access the available borrowings under the credit facility should arise.
The company had $722.2 million of borrowings available under the facility as of June 30.
The amendment, among other things, replaces the existing leverage ratio financial covenant with a leverage ratio financial covenant that requires the company’s ratio of consolidated funded debt, minus the amount of all cash and cash equivalents on its balance sheet in excess of $250 million, to the company’s consolidated EBITDA, not to exceed 4 to 1 as of the last day of any quarter through and including Dec. 31, 2021.
It also amends the existing leverage covenant to provide that it will not be tested until the quarter ending March 31, 2022 and provides that the existing leverage covenant, beginning March 31, 2022, cannot exceed 4 to 1, or as increased to 4.5 to 1.0 in connection with certain acquisitions.
The amendment also limits the company’s ability to pay dividends and repurchase its shares of common stock, par value $1.25, during the covenant relief period, to an amount not to exceed 115% of the total amount of dividends and share repurchases made during the period starting Jan. 1, 2019 through and including June 30, 2020.
The flow control systems manufacturer is based in Irving, Tex.
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