Franklin Electric restates credit agreement to reduce, extend revolver

By Marisa Wong

Los Angeles, May 13 – Franklin Electric Co., Inc. entered into a fourth amended and restated credit agreement on May 13 with JPMorgan Chase Bank, NA as administrative agent, Bank of America, NA as syndication agent and JPMorgan and BofA Securities, Inc. as joint bookrunners and joint lead arrangers, according to an 8-K filing with the Securities and Exchange Commission.

The restated credit agreement extends the maturity date of the company’s third amended and restated credit agreement to May 13, 2026 and decreases the revolving commitment amount to $250 million from $300 million.

Under the amended agreement, the borrowers may request an increase in the aggregate revolving commitments by up to $125 million, with total commitments capped at $375 million.

The previous credit agreement permitted the borrowers to request an increase in the aggregate revolving commitments by up to $150 million, with total commitments capped at $450 million.

Under the amended agreement, the company must pay a commitment fee ranging from 10 basis points to 27.5 bps, depending on its leverage ratio.

The restated credit agreement includes financial covenants such as a maximum leverage ratio of 3.50 to 1.00 and an interest coverage ratio equal to or greater than 3.00 to 1.00. In addition, the restated credit agreement sets the priority debt cap as 20% of total tangible assets.

As in the previous credit agreement, the restated credit agreement also provides for a swingline loan sub-facility of up to $15 million, with an additional discretionary amount of up to $15 million, and a letter-of-credit sub-facility of up to $50 million.

As before, the full amount of the aggregate commitment may be borrowed as multicurrency loans, in sterling, euros, Australian dollars, Canadian dollars, Japanese yen or any other agreed currency.

Borrowings bear interest at Libor plus an applicable margin based on the leverage ratio. The margin ranges form 85 bps to 187.5 bps.

The restated credit agreement also includes a competitive bid option that permits the borrowers to request that the lenders provide bids for the interest rate that will apply to specific loans.

Franklin Electric is a Fort Wayne, Ind.-based manufacturer and distributor of water and fuel systems.

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