Independent Bank gets $75 million term loan, $50 million revolver

By Wendy Van Sickle

Columbus, Ohio, March 28 – Independent Bank Corp. entered into a credit agreement with U.S. Bank NA as lender on Thursday providing for a $75 million senior unsecured term loan and a $50 million senior unsecured revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The revolver is due one year after closing and the term loan three years after closing.

Term loan payments will be interest-only for the first year, then the amounts due will be repaid in seven equal and consecutive quarterly installments based on a four year straight line amortization.

The revolver’s interest rate is Libor plus 115 basis points, and the term loan’s is Libor plus 125 bps.

Borrowings are conditioned on the company’s ability to make representations at the time a given borrowing is drawn.

The facility includes financial covenants requiring the company to maintain maximum non-performing assets/tangible capital on a consolidated basis of 25% at the end of each quarter, reducing to 16% for the quarter ended March 31, 2020; a minimum return on average assets on a consolidated basis of 0.8% at the end of each quarter, measured on a rolling four quarter basis; and a minimum total risk based capital ratio of 11.5% as of the end of each quarter.

Proceeds will be used to finance the company’s acquisition of Massachusetts-based Blue Hills, Bancorp, Inc., to pay related fees and for general corporate purposes.

Independent Bank is based in Ionia, Mich.

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