REV Group closes $350 million ABL revolver, $75 million term loan

By Wendy Van Sickle

Columbus, Ohio, April 25 – REV Group, Inc. entered into agreements for an up to $350 million five-year asset-based revolving credit facility and a $75 million five-year term loan on Tuesday, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreements were entered in conjunction with the company’s acquisition of Ferrara Fire Apparatus, Inc., a Holden, La.-based custom fire apparatus and rescue vehicle manufacturer.

ABL facility

The ABL facility has a $30 million sublimit for swingline loans and a $35 million sublimit for letters of credit and allows for incremental facilities up to $100 million plus the excess, if any, of the borrowing base then in effect.

Interest is Libor plus 150 basis points to 200 bps, based on utilization, with a 0% Libor floor. The initial margin above Libor is 175 bps. There is a commitment fee of 25 bps or 37.5 bps, depending on utilization.

BMO Harris Bank NA and Ally Bank are the joint lead arrangers and bookrunners, and Ally Bank is the administrative agent.

The company must maintain a minimum fixed-charge coverage ratio of 1.00 to 1.00 during certain compliance periods.

Term loan

The term loan agreement allows for incremental facilities up to a total amount of $125 million. It amortizes at 1% per year.

Interest is Libor plus 350 bps with a 1% Libor floor.

Ally Bank is the lead arranger, bookrunner and administrative agent.

Beginning in the fiscal year ending on or about Oct. 31, 2018, REV Group is obligated to prepay certain amounts based on its excess cash flow.

The term loan agreement requires the company to maintain a specified secured leverage ratio, which will be tested quarterly and become more restrictive over the term of the loan.

In connection with closing the ABL and term loan facilities, the company repaid its existing senior secured revolving credit facility.

Based in Milwaukee, REV Group is a designer, manufacturer and distributor of specialty vehicles and related aftermarket parts and services.

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