Atmus Filtration draws on $1 billion facility after separation

By William Gullotti

Buffalo, N.Y., June 2 – Atmus Filtration Technologies Inc., the new parent company of Cummins Filtration Inc., satisfied the closing conditions associated with the filtration company’s separation from Cummins Inc. on May 26 and drew on a $1 billion credit agreement with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The facility, initially inked Sept. 30, 2022 in anticipation of the separation, is composed of a $400 million revolver and a $600 million term loan facility.

The borrowers drew $50 million from the revolver and all $600 million provided by the term facility for use as partial consideration for the filtration business.

As previously reported with the initial signing, the facilities will mature Sept. 30, 2027.

The revolver has a $50 million sublimit for letters of credit and swingline loans and a $200 million sublimit for foreign currency loans.

Interest will be SOFR, Euribor or Sonia plus a margin ranging from 112.5 basis points to 175 bps. There is also a letter-of-credit fee ranging from 112.5 bps to 175 bps and a commitment fee ranging from 17.5 bps to 25 bps. The margins and fees are determined by the borrower’s total net leverage ratio.

The agreement also requires the borrowers to maintain quarterly interest coverage ratios to be at least 3 to 1 and quarterly net leverage ratios not to exceed 4 to 1. Subject to certain conditions, the maximum net leverage ratio may be increased to 4.5 to 1.0 for three succeeding quarters after the increase is requested.

According to the Feb. 15 amendment to the overall agreement, which extended the sale deadline to June 30 from March 30 and updated the involved borrowers, a ticking fee was added to the facility. With the amendment date also being the effective date, the ticking fee starts at 20 bps for the first 44 days following the effective date. The fee steps up by 10 bps after 45 days, 90 days and 135 days and will cease to exist after 272 days.

In addition to serving as administrative agent, BofA is also the swingline lender and letter-of-credit issuer.

JPMorgan Chase Bank, NA, ING Capital LLC, KeyBank NA, HSBC Bank USA, NA, U.S. Bank NA, BofA Securities, Inc., Wells Fargo Securities, LLC and PNC Bank, NA are the joint lead arrangers with BofA Securities, Wells Fargo and PNC also acting as joint bookrunners.

City National Bank and Goldman Sachs Bank USA are the co-documentation agents. Wells Fargo Bank, NA is the syndication agent.

Atmus Filtration was spun off from Cummins in May 2023 as the new parent company of Cummins Filtration.

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