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Regal Rexnord enters into $2.04 billion restated credit agreement
By Rebecca Melvin
Concord, N.H., April 1 – Regal Rexnord Corp. entered into an amended and restated credit agreement on March 28 that provides three facilities for up to $2,036,827,669 and extends the maturities to 2027, according to an 8-K filing with the Securities and Exchange Commission.
The new agreement replaces an amended and restated credit agreement dated Aug. 27, 2018.
The new agreement includes an unsecured term A-1 loan in the initial principal amount of up to $550 million, maturing on March 28, 2027; an unsecured term A-2 loan in the initial principal amount of $486,827,669, under which Regal Rexnord’s subsidiary Land Newco Inc. shall remain the borrower, maturing on March 28, 2027; and an unsecured revolving loan in the initial principal amount of up to $1 billion, maturing on March 28, 2027.
Under the agreement, the company must have a funded debt to EBITDA ratio as of the end of any fiscal quarter of not greater than 3.75 to 1.00. The maximum funded debt to EBITDA ratio will increase, however, to a maximum of 4.25 to 1.00 for any four fiscal quarter period following the consummation of an acquisition of at least $75,000,000, subject to certain restrictions.
The company shall also have an interest coverage ratio as of the end of any fiscal quarter of not less than 3.00 to 1.00.
Proceeds of the facilities will be used to refinance the existing credit agreements, pay fees, costs, and other expenses, and fund working capital needs and for general corporate purposes.
JPMorgan Chase Bank, NA is the administrative agent. U.S. Bank NA, Wells Fargo Securities, LLC, BofA Securities, Inc. and PNC Capital Markets, LLC are joint lead arrangers and joint bookrunners and U.S. Bank NA, Wells Fargo Bank NA, Bank of America NA and PNC Bank NA are co-syndication agents.
Regal Rexnord manufactures electric motors, mechanical and electrical motion controls and power generation products and is based in Beloit, Wis.
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