GSI Group refinances PIK notes using new $80 million facility funds

By Jennifer Chiou

New York, Oct. 19 - GSI Group, Inc. announced that it has repaid in full its 12¼% senior secured PIK election notes due 2014 via proceeds from its new $80 million senior secured credit agreement with Bank of America, NA as administrative agent.

Silicon Valley Bank was the syndication agent with Bank of America Merrill Lynch as lead arranger and book manager on the facility. HSBC also was part of the syndicate.

"We are very pleased to announce the completion of our debt refinancing, which was a major item on our strategic agenda for 2011 and represents an important step forward for the company," chief executive officer John A. Roush said in a news release.

The four-year credit agreement provides for a $40 million term loan facility and a $40 million revolver.

GSI specifically borrowed $73.1 million under the new facility for the note repayment.

The release noted that this refinancing is expected to substantially reduce the company's interest expense, while extending the maturity of its principal debt.

Borrowings under the facility will bear interest at Libor plus an initial spread of 275 basis points through March 31, subject to adjustment thereafter based on GSI's consolidated leverage ratio.

In an 8-K filing with the Securities and Exchange Commission, the company said it also expects that the financing will provide it with additional flexibility to execute its strategic initiatives by allowing it to draw upon the committed $40 million revolver and an uncommitted $25 million incremental facility, subject to the satisfaction of some covenants.

Bedford, Mass.-based GSI makes precision motion component products, lasers and laser-based manufacturing systems.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.