RBC Bearings gets $1.3 billion term loan, $500 million revolver

By Marisa Wong

Los Angeles, Nov. 2 – RBC Bearings Inc. and subsidiary Roller Bearing Co. of America, Inc. entered into a credit agreement on Tuesday for a $1.3 billion term loan facility and a $500 million revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Wells Fargo Bank, NA is administrative agent, collateral agent, swingline lender and letter-of-credit issuer.

Amounts outstanding under the facilities generally bear interest at Libor plus a margin based on the company’s consolidated ratio of total net debt to consolidated EBITDA that ranges from 75 basis points to 200 bps, subject to a 0% Libor floor. Currently, the margin is 175 bps for Libor loans.

The facilities include Libor replacement provisions.

The term loan and revolver will mature on Nov. 2, 2026.

Beginning one full fiscal quarter after the closing date, the term loan will amortize in quarterly installments of 1.25%, stepping up to 1.875% beginning March 31, 2024, to 2.5% on March 31, 2025 and to 3.125% on March 31, 2026. Remaining outstanding amounts are due at maturity.

The credit agreement requires the company to comply with various covenants, including the following financial covenants beginning with the test period ending Dec. 31: a maximum total net leverage ratio of 5.5 to 1.0, which will decrease during subsequent test periods, provided that, no more than once during the term of the facilities, that maximum ratio may be increased by 0.5 to 1.0 for a period of 12 months after the consummation of a material acquisition; and a minimum interest coverage ratio of 2.0 to 1.0.

Wells Fargo Securities, LLC, Goldman Sachs Bank USA, Bank of America, NA, Citibank, NA, Truist Securities, Inc., Citizens Bank, NA, KeyBank NA, Fifth Third Bank, NA and Regions Capital Markets are the joint lead arrangers and bookrunners.

Goldman Sachs, Bank of America, Citibank, Truist Bank, Citizens Bank, KeyBank, Fifth Third, Regions Bank are co-syndication agents.

Capital One, NA, PNC Bank, NA, City National Bank, First National Bank of Pennsylvania, HSBC Bank USA, NA, Santander Bank, NA, U.S. Bank NA and TD Bank, NA are co-documentation agents.

On the closing date, the company repaid the outstanding amounts under its existing credit agreement dated April 24, 2015 with Wells Fargo Bank as administrative agent and terminated the credit agreement, which had been set to mature on Jan. 31, 2024.

RBC Bearings is an Oxford, Conn.-based manufacturer of highly engineered precision bearings and components for the industrial, defense and aerospace industries.

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