Neff restates revolver to expand borrowing capacity, extend maturity

By Marisa Wong

Morgantown, W.Va., March 1 – Neff. Corp.’s subsidiaries, Neff Holdings LLC, Neff LLC and Neff Rental LLC, amended and restated their senior secured revolving credit facility on Feb. 25, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

Among other things, the companies increased the total maximum borrowing capacity to $475 million from $425 million and extended the maturity date to Feb. 25, 2021 from Nov. 20, 2018.

The restated facility also increases the amount by which Neff LLC can request incremental revolving loan commitments to $100 million from $25 million.

Pricing under the amended facility is as follows: if average availability is less than $125 million, the applicable margin for Libor loans and letter-of-credit obligations is 200 basis points; if average availability is equal to or greater than $125 million but less than $225 million, the applicable margin for Libor loans and letter-of-credit obligations is 175 bps; and if average availability is equal to or greater than $225 million, the applicable margin is 150 bps.

The applicable margin for the unused line was also amended. If the utilized amount is greater than or equal to 50%, then the applicable margin is 25 bps, and if the utilized amount is less than 50%, then the applicable margin is 37.5 bps.

In addition, the borrowers amended the excess availability requirements relating to cash dominion to provide that cash dominion will occur if excess availability is, for two consecutive business days, less than the lesser of 10% of the aggregate revolving loan commitments under the restated revolver and 10% of the borrowing base.

The companies modified some baskets, thresholds and ratios in some covenants as well, for more room to incur debt, to make acquisitions and restricted payments and to prepay or second-lien loans and other debt.

The amendment also modified the consolidated total leverage ratio financial covenant (a) so that the covenant will not be triggered unless excess availability is less than the greater of (i) the lesser of 10% of the revolving loan commitments and 10% of the borrowing base and (ii) $35 million and (b) to include the following maximum consolidated total leverage ratios for the following periods: 5:0 to 1.0 for each fiscal quarter ending during the period from Feb. 25 through and including Dec. 31, 2016, 4.75 to 1.0 for each quarter ending during the period from Jan. 1, 2017 through and including Dec. 31, 2017 and 4.5 to 1.0 for each quarter ended during the period from Jan. 1, 2018 and thereafter.

Finally, the restated agreement eliminates the requirement that Neff LLC deliver a third appraisal to the administrative agent if excess availability is less than 20% of the aggregate revolving loan commitments.

Neff is a Miami-based privately owned construction equipment rental company.

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