Student Transportation Inc. and its subsidiaries announced today it has signed a new five year amended agreement with its senior lenders to extend the current bank credit facility agreement to February 2018. The company was in the second year of a five year term when it sought a new extended and amended agreement to secure its credit position for an additional five years.
The $155 million bank credit facility was arranged by BMO Capital Markets and funded by BMO Harris Bank, The Bank of Nova Scotia, Raymond James, Siemens Financial Services and The Toronto-Dominion Bank. The new amended facility is a $15 million increase over the prior one and includes a lower base rate, maintains leverage covenants at existing levels and allows additional flexibility to the company for leasing and share buyback options, if needed. The new amended facility also extends a $100 million "accordion feature" which allows the company access to a larger facility should it ever be needed.
Commenting on the negotiated transaction, CFO Patrick Walker said, "We wanted to take advantage of the increased longevity of the term and lower rates being offered today to companies with similar credit profiles such as ours. The syndicate members were receptive to our extension request, as some have been in the credit facility for the past 16 years as we have grown from a start-up company in 1997 to one with sales exceeding $450 million next year. Our bankers know the company well and have allowed us to use debt wisely for growth. We have a solid relationship with our senior lenders and this shows the confidence they have in our management and our business. We are extremely pleased to welcome Toronto Dominion Bank to join the group in replacement of CIBC, who had been a member of the syndicate for many years but chose not to participate in the lower rate facility extension. BMO, Scotia and Siemens all increased their position, which is always a sign of confidence."
The credit facility extension required the approval of the company's senior note holders, Sun Life and Canada Life, which was also attained.
Founded in 1997, Student Transportation is North America's third-largest and most progressive provider of school bus transportation services, operating more than 9,500 vehicles.