Fortune Brands gets $1.25 billion five-year revolving credit facility

By Sarah Lizee

Olympia, Wash., Oct. 1 – Fortune Brands Home & Security, Inc. entered into a $1.25 billion five-year unsecured revolving credit agreement with JPMorgan Chase Bank, NA as administrative agent on Friday, according to an 8-K filing with the Securities and Exchange Commission.

The new revolver amended and restated the company’s credit agreement dated as of June 30, 2016.

Up to $50 million of the revolver may be used for letters of credit.

The proceeds may be used for general corporate purposes, including working capital, capital expenditures, permitted acquisitions and other lawful corporate purposes.

Interest is Libor plus 90 basis points to 140 bps, depending on ratings.

There is a covenant under which the company is required to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of 3 to 1.

In addition, the credit agreement includes a covenant under which the company’s ratio of consolidated total debt minus certain cash and cash equivalents held by the company and its subsidiaries to consolidated EBITDA generally may not exceed 3.5 to 1.0.

Loans that were outstanding under the June 30, 2016 credit agreement generally become loans outstanding under the new credit agreement, with adjustments made to reflect changes in lenders participating in the two credit facilities. As a result, $165 million in borrowings were outstanding under the credit agreement on Friday.

The Deerfield, Ill., company creates products and services for homeowners, including entry door systems, windows, faucets and locks.

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