RBC Bearings gets $550 million five-year loans at Libor plus 150 bps

By Susanna Moon

Chicago, April 29 – RBC Bearings Inc. and Roller Bearing Co. of America, Inc. obtained a $200 million five-year term loan and a $350 million five-year revolving credit facility.

The company entered into a credit agreement last Friday with Wells Fargo Bank, NA as administrative agent, collateral agent, swingline lender and letter-of-credit issuer, according to an 8-K filing with the Securities and Exchange Commission.

Wells Fargo Securities, LLC and J.P. Morgan Securities LLC are the joint lead arrangers and bookrunners. JPMorgan Chase Bank, NA is the syndication agent. Bank of America, NA, Keybank NA and Citizens Bank, NA are the co-documentation agents.

Interest on the loans is initially Libor plus 150 basis points, based on leverage, with a spread ranging from Libor plus 100 bps to Libor plus 200 bps.

The term loan and revolver will mature on April 24, 2020.

Beginning one full fiscal quarter after April 24, the term loan will amortize in quarterly installments.

The financial covenants, beginning with the test period ending Sept. 30, require a maximum total net leverage ratio of 3.5 times provided that, no more than once during the term of the facilities, the maximum ratio may be increased to 4 times for a period of 12 months after the completion of a material acquisition and a minimum interest coverage ratio of 2.75 times.

As reported March 26, RBC Bearings received a commitment for the $550 million credit facility to help fund its acquisition of the Sargent Aerospace & Defense business of Dover Corp.

Closing on the $500 million acquisition is expected in the second quarter.

According to the 8-K, the company repaid and terminated the outstanding amounts under its existing credit agreement dated Nov. 30, 2010 with J.P. Morgan Chase Bank, NA and terminated the related security, agreement, guaranty and ancillary agreements. No early termination penalties were incurred with the terminations.

RBC Bearings is an Oxford, Conn.-based manufacturer of highly engineered precision plain, roller and ball bearings for the industrial, defense and aerospace industries. Sargent is a Tucson-based provider of precision-engineered products, solutions and repairs for aircraft airframes and engines, rotorcraft, submarines and land vehicles.

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