Newport Corporation has entered into a new $275 million senior secured revolving credit facility, with a $50 million expansion option, through a syndicate of global financial institutions led by JPMorgan Chase Bank, N.A.  The new credit facility replaces the company's existing $250 million senior secured credit facility, has a term of five years and initially bears an interest rate of 2.0% over LIBOR, or 1.0% over a base rate, at the company's option, with a commitment fee of 0.35% on the undrawn amount of the facility.  The interest rate spreads and commitment fee are subject to adjustment in future periods based on the company's total leverage ratio, as set forth in the credit agreement.  The facility is subject to customary covenants, including those relating to the company's total leverage and fixed charge coverage ratios.

Upon the closing of this new credit facility, Newport repaid its existing facility in full by borrowing $120 million under the new facility, and repaying the remainder from the company's cash balances, which reduced its outstanding senior secured debt by approximately $32.6 million.  The company is permitted to use the new facility for working capital, acquisitions, stock repurchases and other general corporate purposes.

Newport expects the lower interest rates and fees under the new facility, combined with the lower loan balance, to reduce its financing costs by approximately $0.5 million per quarter beginning in the third quarter of 2013.  The company will record a non-cash charge of $3.4 million in the third quarter of 2013 to write off the remaining unamortized balance of the previously capitalized fees related to the prior credit facility.

Newport Corporation is a leading global supplier of advanced-technology products and systems to customers in the scientific research, microelectronics, life and health sciences, defense and security, and industrial manufacturing markets.  Newport's innovative solutions leverage its expertise in advanced technologies, including lasers, photonics and precision motion equipment, and optical components and sub-systems, to enhance the capabilities and productivity of its customers' manufacturing, engineering and research applications.