TRC closes $75 million five-year revolver at Libor plus 200-250 bps

By Susanna Moon

Chicago, April 22 - TRC Cos. Inc. obtained a $75 million five-year revolving credit facility with a $15 million sublimit available for the issuance of letters of credit.

TRC may request an increase in the total size of up to $95 million.

Interest on the loans is Libor plus 200 basis points to 250 bps, based on leverage.

The company closed the agreement on April 16 with RBS Citizens, NA as lender, administrative agent, lead arranger and bookrunner, according to an 8-K filing with the Securities and Exchange Commission.

JPMorgan Chase Bank, NA is a lender and syndication agent.

TRC's obligations under the credit agreement are secured by a pledge of substantially all of its assets and guaranteed by its principal operating subsidiaries.

Under the terms TRC is required to maintain a fixed charge coverage ratio of at least 1.25 times and a leverage ratio of no more than 2 times.

The credit agreement also requires TRC to achieve minimum levels of consolidated EBITDA of $15 million, $17 million and $20 million for the 12-month periods ending June 30, June 30, 2014 and June 30, 2015 and after that, respectively.

On April 16, TRC borrowed about $4.7 million under the credit agreement to pay fees and expenses associated with the new facility and cash collateralize letters of credit outstanding under the previous credit agreement until those letters of credit are returned by the beneficiaries upon acceptance of the replacement letters of credit under the new agreement, the filing noted.

Proceeds will be used to support general working capital needs as well as growth initiatives.

The facility replaces the company's $65 million revolver with Wells Fargo Capital Finance, which was set to expire in July 2014. There was no debt outstanding under the previous facility, and no termination penalties were paid as a result of the termination.

The company paid $4.2 million, however, to cash collateralize letters of credit outstanding under the previous agreement. New letters of credit were issued under the credit agreement to replace the collateralized letters and upon return of the collateralized letters to the prior issuer, the cash collateral will be returned to TRC.

"This new banking relationship provides TRC with increased borrowing capacity and significant financial flexibility to support our long term growth strategy," the company's chairman and chief executive officer Chris Vincze said in a press release.

TRC is a Lowell, Mass.-based engineering, consulting and construction management firm.

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