Ferguson refinances with new term loan, amendments to revolvers

By Marisa Wong

Los Angeles, Oct. 13 – Ferguson plc announced a series of financing transactions to increase its liquidity by $800 million, according to a press release and an 8-K filing with the Securities and Exchange Commission.

The financing transactions include the following:

• A new $500 million syndicated three-year term loan that matures on Oct. 7, 2025;

• An increase to the company’s existing receivables securitization facility with Royal Bank of Canada as administrative agent by $300 million, from $800 million to $1.1 billion, and an extension of the facility through Oct. 7, 2025;

• An increase to its existing revolver due March 2026 with ING Bank NV, London Branch as agent by $250 million, from $1.1 billion to $1.35 billion; and

• A reduction of its existing 364-day bilateral revolver due March 2023 with SMBC Bank International plc as agent by $250 million, from $500 million to $250 million.

The additional liquidity will be used for general corporate purposes, the company said.

Term loan details

The new term loan bears interest at term SOFR plus a credit spread adjustment of 10 basis points plus a margin ranging from 100 bps to 150 bps, depending on credit ratings.

The term loan requires the company to maintain on a consolidated basis, as of the last day of each fiscal quarter, a maximum net leverage ratio of 3.50 to 1.00, with a step-up to 4.00 to 1.00 with respect to each of the four fiscal quarters ending immediately after certain material acquisitions.

PNC Bank, NA is the administrative agent. PNC Capital Markets LLC is lead arranger and bookrunner.

More loan amendments

The company also amended its existing credit facilities to replace Libor with SOFR as the benchmark rate.

For the revolver due March 2026, the cap applicable to some receivables financings was removed, and the cross-acceleration event of default threshold was increased to $75 million from $25 million.

The amendment for the receivables securitization facility also gives the company the ability to increase the aggregate total available commitments by an additional $400 million and add a swingline from one of the lenders for up to $100 million in same day funding.

Based in Wokingham, England, Ferguson distributes plumbing and heating products in the United Kingdom, United States and the Netherlands.

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