Improves Flexibility to Pursue Growth and Value-Creation Initiatives
Extends Maturity Schedule by More Than Two Years
CHARLOTTE, N.C., Dec. 20, 2017 (GLOBE NEWSWIRE) — SPX Corporation (NYSE:SPXC) announced today that it has entered into an amendment of its Credit Agreement, resulting in a five-year, $900 million credit facility with a group of lenders arranged by BofA Merrill Lynch. Funds available under the amended agreement were used to repay all outstanding borrowings under the original agreement which was executed in mid-2015.
The amended Credit Agreement will expire on December 19, 2022 and consists of a $350 million term loan, a $350 million revolving credit facility and two foreign trade credit facilities totaling $200 million. The term loan requires mandatory payments of original principal of 1.25% per quarter beginning in Q1 2019. Interest on borrowings is based on Libor plus a margin (currently 175 basis points) that varies with the company’s net leverage covenant.
Scott Sproule, SPX’s Chief Financial Officer, commented “I’m pleased with the result of the amendment to our credit agreement that we completed with our banking partners. Based on the improved financial performance of SPX since the spin in late 2015, and taking advantage of attractive market conditions, we were able to negotiate terms that significantly enhance our financial flexibility as we execute on our stated growth and value creation initiatives, including acquisitions. This amendment also extends our maturity schedule and reduces near-term cash debt service requirements.”
The amended Credit Agreement contains customary representations, warranties, covenants and events of default, as well as two primary financial covenants that require SPX to maintain an interest coverage ratio (EBITDA to interest expense) of no less than 3.50, and, a net leverage ratio (net debt-to-EBITDA) of no greater than 3.50 as of the last date of any fiscal quarter. The new net leverage ratio covenant is 0.25 higher than in the prior agreement and provides greater flexibility for acquisitions, allowing for an expansion to 4.0 for 12 months following an acquisition with a purchase price of more than $150 million.
The company today also filed a Form 8-K with the Securities and Exchange Commission describing additional terms and conditions of the amended agreement.
About SPX Corporation: SPX Corporation is a supplier of highly engineered products and technologies, holding leadership positions in the HVAC, detection and measurement, and engineered solutions markets. Based in Charlotte, North Carolina, SPX Corporation had approximately $1.5 billion in annual revenue in 2016 and more than 5,000 employees in about 15 countries. SPX Corporation is listed on the New York Stock Exchange under the ticker symbol “SPXC.” For more information, please visit www.spx.com.
Investor and Media Contacts:
Paul Clegg, Vice President, Investor Relations and Communications
Pat Uotila, Manager, Investor Relations
Source: SPX Corporation