Builders FirstSource Reprices and Extends Senior Secured Term Loan Facility due 2024 at LIBOR +3%, a 0.75% reduction
January 31 2017 - 4:14PM
Builders FirstSource, Inc.
(Nasdaq:BLDR) (the “Company”), a leading supplier and manufacturer
of structural and related building products for residential new
construction and home repair and remodeling in the United States,
today announced that it has secured commitments for the reprice of
its previous $468 million senior secured term loan facility due
2022 (the “Previous Term Loan Facility”) through an amendment and
extension to its term loan credit agreement providing for a $468
million senior secured term loan facility due 2024 (the “New Term
Loan Facility”) and an interest reduction of 0.75%. The
transaction closing is expected on February 23, 2017.
Term loans under the $468 million New Term Loan
Facility bear interest based on either the eurodollar rate or base
rate (a rate equal to the highest of an agreed benchmark rate
commercially available, the federal funds effective rate plus 0.50%
and the eurodollar rate plus 1.0%) plus, in each case, an
applicable margin, at the Company’s option. The applicable margin
in respect of the loans under the New Term Loan Facility will be
(x) 3% in the case of Eurodollar rate loans and (y) 2% in the case
of base rate loans. This represents a 0.75% reduction from the
Previous Term Loan Facility. Deutsche Bank AG New York Branch
continues to serve as administrative agent and collateral agent
under the New Term Loan Facility.
The repricing enables the company to reduce the
interest rate on its Term Loan by 0.75% as well as extend the
maturity to 2024. This transaction should reduce go forward
interest by approximately $3 million annually.
Floyd Sherman, the Company’s Chief Executive
Officer, commented, “We are always actively evaluating
opportunistic transactions to lower our interest expense,
strengthen our capital position, and improve our cash flow
yield for our shareholders. The New Term Loan Facility will lower
our go forward annual cash interest expense by approximately $3
million, as well as extend the maturity of our debt.”
Peter Jackson, the Company’s Chief Financial
Officer, added, “Our weighted average debt maturity on our term
loans and bonds is over 7 years, with the closest maturity in
August of 2023. Our debt structure continues to provide the company
the flexibility for debt repayment, and the terms of our debt allow
the company to repay our most expensive debt first, which will
result in stronger free cash flow and higher debt repayment.”
Cautionary
Notice
Statements in this news release that are not
purely historical facts or that necessarily depend upon future
events, including statements about anticipations, beliefs,
expectations, hopes, intentions or strategies for the future, may
be forward-looking statements within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended, and Section 27A of
the Securities Act. Readers are cautioned not to place undue
reliance on forward-looking statements. All forward-looking
statements are based upon information available to Builders
FirstSource, Inc. on the date this release was submitted. Builders
FirstSource, Inc. undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Any forward-looking
statements involve risks and uncertainties that could cause actual
events or results to differ materially from the events or results
described in the forward-looking statements. Further
information regarding factors that could affect our financial and
other results can be found in the risk factors section of Builders
FirstSource, Inc.’s most recent annual report on Form 10-K filed
with the Securities and Exchange Commission. Consequently, all
forward-looking statements in this release are qualified by the
factors, risks and uncertainties contained therein.
Investor Relations
Jennifer Pasquino
SVP Investor Relations
Builders FirstSource, Inc.
(303) 262-8571
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