Douglas Dynamics signs $325 million credit agreement due 2026

Chicago, June 14 – Douglas Dynamics Inc., as guarantor, entered into a credit facility for $325 million with JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The facility comprises a $225 million term loan and a $100 million revolver. Under the revolver, $10 million is available as letters of credit and $15 million will be available for the issuance of short-term swingline loans.

Douglas Dynamics and its subsidiaries can also request increases to the revolver and/or incremental term loans for up to $175 million, subject to some terms and conditions.

The credit facility matures June 9, 2026.

A fee on unused amounts under the revolver will vary from 15 basis points to 30 bps, dependent upon the company’s leverage ratio.

The term loan will bear interest at Libor times the statutory reserve rate plus 137.5 bps to 200 bps, also based on leverage.

The company can either decide to use the same interest rate for the revolver, subject to a floor of 1%, or the prime rate, the NYFRB rate plus 50 bps or one-month Libor times the statutory reserve rate plus 100 bps.

Proceeds from the term loan will be used to refinance an existing senior secured term loan and revolving credit facility from prior credit agreements, specifically $275 million in a term loan from December 2014 and a $100 million revolver from June 8, 2020.

The credit facility requires Douglas Dynamics to maintain a leverage ratio of not more than 3.5x as of the last day of any fiscal quarter starting June 30 and the consolidated interest coverage ration must be at least 3x as of the last day of any fiscal quarter, also starting June 30.

Subsidiary Douglas Dynamics, LLC is the term loan borrower.

Borrowers for the revolver were subsidiaries Douglas Dynamics, LLC, Fisher, LLC, Trynex International LLC, Henderson Enterprises Group, Inc., Henderson Products, Inc., and Dejana Truck & Utility Equipment Co., LLC.

J.P. Morgan Chase Bank, NA and CIBC Bank USA are joint lead arrangers and joint bookrunners.

CIBC Bank USA is syndication agent, and Bank of America, NA and Citizens Bank, NA are co-documentation agents.

Douglas Dynamics is a Milwaukee-based manufacturer of vehicle attachments and equipment.

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