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Kennametal enters $700 million five-year unsecured credit agreement
By Sarah Lizee
Olympia, Wash., June 22 – Kennametal Inc. and wholly owned foreign subsidiary Kennametal Europe GmbH entered into a $700 million five-year unsecured fifth amended and restated credit agreement with Bank of America, NA as administrative agent on Thursday, according to an 8-K filing with the Securities and Exchange Commission.
The agreement amends, restates and replaces the company’s fourth amended and restated credit agreement dated as of April 15, 2016.
Borrowings bear interest at Libor plus 81 basis points to 137.5 bps and the facility fee is 9 bps to 25 bps, both depending on debt ratings.
There is a $300 million accordion feature.
Loans are available on a revolving basis in dollars, euros, pounds, Canadian dollars and Japanese yen.
There is a $300 million sublimit for multicurrency borrowings, a $50 million sublimit for letters of credit and a $100 million sublimit for swingline loans, with $75 million of that amount available to the parent and $25 million available to Kennametal Europe. The sublimit for loans to foreign borrowers is set at $250 million.
Merrill Lynch, Pierce, Fenner & Smith Inc., PNC Capital Markets LLC and JPMorgan Chase Bank, NA are joint lead arrangers and bookrunners.
Bank of America Merrill Lynch International Ltd. is the euro swingline lender. PNC Bank, NA and JPMorgan are co-syndication agents and Citizens Bank of Pennsylvania, MUFG Bank, Ltd. and Mizuho Bank, Ltd. are co-documentation agents.
The company must maintain a minimum consolidated interest coverage ratio of 3.5 to 1 and a maximum consolidated leverage ratio of not more than 3.5 to 1, with temporary adjustments in connection with up to two qualified acquisitions. Both figures are calculated on a rolling four-quarter basis.
The consolidated EBITDA definition was modified to permit up to $80 million in total cash restructuring charges to be added back during the period commencing with the company’s fiscal quarter ending Sept. 30 through Dec. 31, 2021.
Kennametal is a Latrobe, Pa., manufacturer, marketer and distributor of cutting tools, tooling systems, supplies and technical services and wear-resistant parts.
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