Motorcar Parts refinances credit facility to lower interest rates

By Jennifer Chiou

New York, Nov. 12 - Motorcar Parts of America, Inc. announced that it has amended and restated its $125 million credit facility with PNC Bank NA as administrative agent.

According to a news release, the facility is comprised of a $95 million term loan and a $30 million revolving credit facility with Cerberus Business Finance, LLC as collateral agent.

Based on current interest rates, the rate for the new term loan is 6.75% with a Libor floor of 150 basis points plus a margin of 525 bps. The release noted that the revolver's rate is Libor plus 250 bps, representing a saving of about 3.75% for the term loan and 0.5% on the revolver.

At closing, the company had $95 million of term loans outstanding in addition to $10 million of revolver borrowings.

The company said that its prior $125 million credit facility was comprised of a $105 million term loan and a $20 million revolver.

"The amended and restated credit facility reduces our blended rates by approximately 4 percent and also gives the company the flexibility to repurchase stock and to pay down an incremental $10 million of the term loan within the next 120 days," Selwyn Joffe, chairman, president and chief executive officer, said in the release.

"The new facility will result in reduced interest expense and provides greater financial flexibility to execute management's strategic growth plans."

Los Angeles-based Motorcar provides remanufactured alternators and starters for the automotive aftermarket.

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