Remy International closed the refinancing of its existing senior secured Term B Loan with a new $300 million seven-year Term B Loan facility, through Bank of America, N.A. as administrative agent and joint lead arrangers Merrill Lynch, Pierce, Fenner & Smith, UBS Securities, Wells Fargo Securities and Deutsche Bank Securities. Remy also amended the existing $95 million ABL Credit Agreement with Wells Fargo Capital Finance and Bank of America, N.A.
The new capital structure will provide significant benefits for the company including:
- Reducing the Term B Loan cash yield from 6.25% to 4.25%
- Providing increased financial flexibility with updated covenants
- Extending the maturity of the Term B Loan from December 17, 2016 to March 5, 2020
- Extending the maturity of the ABL Credit Agreement from December 17, 2015 to September 5, 2018
- Lowering the cost of borrowing on the asset-based line
Fred Knechtel, Remy International’s chief financial officer said, “We were pleased to be able to take advantage of the strong credit markets to refinance the Term B Loan and amend the ABL. This refinancing lowers interest expense by approximately $6 million and adds $0.11 to diluted earnings per share.”
"The favorable terms are a reflection of improved markets and Remy’s strong performance. The new credit agreement provides us the financial flexibility needed to fund potential acquisitions and the regional expansion necessary to support our global growth strategy,” added Jay Pittas, Remy international’s president and chief executive officer.
Founded by the Remy Brothers in 1896, Remy International is a leading global manufacturer and remanufacturer of alternators, starter motors and electric traction motors. Headquartered in Pendleton, IN, with global operations across five continents and ten countries, Remy International markets products under the Delco Remy and Remy brands.