Esterline Technologies amends facility to add $175 million term loan

By Susanna Moon

Chicago, April 9 - Esterline Technologies Corp. obtained a $175 million term loan on Monday and used proceeds to redeem all of its 6 5/8% senior notes due 2017, according to an 8-K filing made with the Securities and Exchange Commission.

Interest on the loans is initially Libor plus 175 basis points, with the spread ranging from Libor plus 150 bps to 225 bps, based on leverage.

The company amended its credit agreement dated March 11, 2011 with Wells Fargo Bank, NA as administrative agent on Monday.

The credit terms originally provided debt financing to Esterline in the form of a revolving loan facility of up to $460 million, including a letter of credit subfacility of up to $100 million and swingline subfacility of up to $15 million. The revolver was amended in July 2011 to provide a €125 million term loan to one of Esterline's indirect subsidiaries organized under the laws of England and Wales, the filing noted.

The maturity date for the U.S. term loan, the euro term loan and the revolver is July 20, 2016.

Esterline's obligations under the U.S. term loan are secured by all of the collateral pledged to secure the revolver.

Wells Fargo Securities, LLC, BofA Merrill Lynch and BNP Paribas are the joint lead arrangers. Wells Fargo Securities, LLC, BofA Merrill Lynch, Union Bank, NA and U.S. Bank NA are the joint bookrunner.

Bank of America, NA and BNP Paribas are the co-syndication agents. Union Bank, NA and U.S. Bank NA are the co-documentation agents.

Original loan terms

Esterline entered into a $460 million five-year revolving credit facility on March 15, 2011 with interest at Libor plus 175 bps with a spread of Libor plus 150 bps to 225 bps, based on leverage, as previously reported.

The commitment fee was initially 30 bps, with a range of 30 bps to 40 bps.

The facility included an upsize option of up to $250 million through the revolver or by adding term loans.

The financial covenants required the company to maintain a leverage ratio of no more than 4.25 times.

Wells Fargo Securities, LLC and BofA Merrill Lynch were the joint lead arrangers. Wells Fargo, BofA Merrill Lynch, Union Bank, NA and US Bank, NA were the joint bookrunners. Wells Fargo Bank, NA was the administrative agent.

At closing, the company drew $115 million under the revolver and had $2.61 million of letters of credit.

Bellevue, Wash.-based Esterline makes products and systems for the aerospace and defense, industrial/commercial and medical markets.

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