Charles River details $250 million expanded five-year revolver

By Mary-Katherine Stinson

Lexington, Ky., Aug. 23 – Charles River Associates detailed a new and expanded revolving credit facility in an 8-K filing with the Securities and Exchange Commission.

As previously reported, Charles River Associates and its subsidiaries CRA International (UK) Ltd., CRA International Ltd. and CRA International (Netherlands) BV entered into a five-year facility for an aggregate principal amount of up to $250 million.

The amount may be decreased at the company’s option to $200 million from July 16 through Jan. 15 of each year when its working capital needs are typically diminished.

There is a $35 million sublimit for borrowings by the subsidiaries, a $75 million sublimit for non-U.S. dollar borrowings approved pursuant to the credit agreement, a $25 million sublimit for the issuance of letters of credit and a $15 million sublimit for swingline loans by the swingline lender.

Borrowings under the revolving credit facility for dollar-denominated loans bear interest at SOFR with a margin ranging from 125 basis points to 200 bps depending on the consolidated net leverage ratio. Borrowings in alternate currencies will bear interest at Euribor, Sonia, CDOR or Saron or, in the case of borrowings in any other alternate currency, the relevant daily or term rate determined as provided in the credit agreement ranging from 125 bps to 200 bps depending on the consolidated net leverage ratio.

There is a fee on the amount available to be drawn under any letter of credit issued under the revolver at an annual rate that varies between 125 bps and 200 bps depending on the consolidated net leverage ratio. There is also a fee on the unused portion of the revolving credit facility at an annual rate that varies between 17.5 bps and 25 bps depending on the consolidated net leverage ratio.

The facility replaced the company’s existing revolver that was originally for an aggregate principal amount of up to $125 million and increased to $175 million last year and was scheduled to mature in October 2022.

Proceeds of the new revolver will be used to repay outstanding amounts under the existing revolver and will provide working capital to support continued growth in the business and fund other general corporate purposes.

At closing, the company borrowed $50 million under the revolver. And $4.4 million in letters of credit that were issued under the company’s existing credit agreement were issued and outstanding under the new revolver.

Borrowings may be repaid without penalty anytime under the agreement other than customary breakage costs. All borrowings must be repaid no later than Aug. 19, 2027.

The company may request from time to time that the lenders under the credit agreement and/or other financial institutions that would become lenders provide additional revolving credit commitments, provided that the aggregate principal amount of all such additional commitments does not exceed the greater of $125 million and 100% of the consolidated EBITDA for the applicable trailing four-fiscal-quarter period.

Bank of America, NA is the swingline lender, a letter-of-credit issuing bank and the administrative agent.

BofA Securities, Inc. is the bookrunner.

BofA Securities and Citizens Bank, NA are the joint lead arrangers.

Citizens Bank, NA is also a letter-of-credit issuing bank and the syndication manager.

Joining Bank of America and Citizens Financial Group as lenders are TD Bank, Eastern Bank and Brookline Bank.

Charles River is a Boston-based global consulting firm specializing in economic, financial and management consulting services.

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