Raven Industries enters into $100 million three-year revolver

By Angela McDaniels

Tacoma, Wash., Sept. 23 – Raven Industries, Inc. entered into a new $100 million senior revolving credit facility due Sept. 20, 2022, according to an 8-K filing with the Securities and Exchange Commission.

BofA Securities, Inc. is the bookrunner and lead arranger. Bank of America, NA is the administrative agent. Wells Fargo Bank, NA is a lender.

The initial interest rate is Libor plus 87.5 basis points, and the initial commitment fee is 7.5 bps.

The margin over Libor ranges from 87.5 bps to 150 bps, and the commitment fee ranges from 7.5 bps to 15 bps. Both depend on the company’s ratio of funded debt to EBITDA.

The revolver has a $100 million accordion feature.

The credit agreement also permits the issuance of letters of credit and swingline loans.

Proceeds will be used for strategic business purposes and for working capital needs.

The credit agreement contains financial covenants that require the company to maintain a ratio of EBITDA to interest expense of not less than 3.5 to 1.0 and a ratio of funded debt to EBITDA of not greater than 3.5 to 1.0.

Some of the company's domestic subsidiaries guarantee its obligations under the credit agreement. From time to time, the company may be required to cause additional domestic subsidiaries to become guarantors.

This new revolver replaced the company’s existing credit agreement, which was scheduled to expire next fiscal year and has been terminated. The company had no outstanding borrowings under the credit agreement prior to termination.

“The company’s strong earnings and cash flows provide more than enough funding for our organic growth strategy, but as we continue to evaluate a growing number of strategic acquisition opportunities, it is important to maintain access to committed financing at attractive borrowing rates. This revolving credit facility accomplishes that and ensures continued flexibility to pursue increased acquisition activity to augment our long-term profit growth,” vice president and chief financial officer Steven Brazones said in a news release.

Raven Industries is based in Sioux Falls, S.D., and makes precision agriculture, specialty films and lighter-than-air technologies.

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