Stoneridge obtains new $300 million revolver at Libor plus 145 bps

By Toni Weeks

San Luis Obispo, Calif., Sept. 15 – Stoneridge, Inc. entered into a new $300 million senior secured revolving credit facility last Friday with PNC Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

Borrowings will bear interest at Libor plus a margin that is initially expected to be 145 basis points and may range from 105 bps to 190 bps based on leverage. The facility fee, initially 30 bps, may range from 20 bps to 35 bps, and the letter-of-credit fee may range from 105 bps to 190 bps.

The loan, which matures Sept. 12, 2019, will replace the company’s existing $100 million asset-based facility and includes an accordion feature for an additional $80 million. It will be used to redeem the company’s remaining $157.5 million of outstanding 9˝% senior secured notes in mid-October.

The company expects initial borrowing under the new facility to be about $110 million after redemption of the notes. Stoneridge also intends to use borrowings for working capital and general corporate purposes, including funding investments in strategic growth initiatives.

“The new credit facility will reduce interest expense significantly and offer much greater flexibility to our capital structure while improving our free cash flow, which will provide greater value to our shareholders,” president and chief executive officer John C. Corey said in the release.

PNC Capital Markets LLC and JPMorgan Chase Bank, NA are the joint lead arrangers, with JPMorgan as syndication agent. Compass Bank and Citizens Bank, NA are co-documentation agents.

Warren, Ohio-based Stoneridge is a designer and manufacturer of highly engineered electrical and electronic components, modules and systems primarily for the automotive, commercial vehicle, motorcycle and off-highway vehicle markets.

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