Comfort Systems lifts line of credit to $175 million via Wells Fargo

By Susanna Moon

Chicago, June 28 - Comfort Systems USA, Inc. obtained an amended five-year facility for an increased line of credit of $175 million.

The line of credit includes up to $125 million issuable in the form of letters of credit.

The company entered into the facility on Tuesday. It was arranged by Wells Fargo Bank, NA, and the syndicate of banks includes Wells Fargo Bank, Bank of Texas, NA, Capital One, NA, Regions Bank and Branch Bank & Trust Co., according to an 8-K filing with the Securities and Exchange Commission.

The amended facility is secured by a first lien on substantially all of the company's personal property except for assets related to projects subject to surety bonds and assets held by some unrestricted subsidiaries and a second lien on the company's assets related to projects subject to surety bonds.

The amended facility expires in July 2018 and contains only two financial covenants.

The company must maintain a ratio of consolidated total debt to consolidated EBITDA of no more than 3 times for any four fiscal quarter period ending June 30 through Dec. 31, 2014, stepping down to 2.75 times for any period ending March 31, 2015 through Dec. 31, 2015 and to 2.5 times for the period ending March 31, 2016 through maturity.

The facility also requires the ratio of (a) consolidated EBITDA, less non-financed capital expenditures, tax provision, dividends and amounts used to repurchase stock to (b) the sum of interest expense and scheduled principal payments be at least 2 times.

The amended terms also permit acquisitions of up to $20 million per transaction, provided that the aggregate purchase price of the acquisition and of acquisitions in the same fiscal year does not exceed $50 million. However, these limitations only apply when the company's net leverage ratio is more than 2 times.

Comfort Systems is a Houston provider of commercial/industrial heating, ventilation and air conditioning services.

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