LKQ Corporation Announces New $1.0 Billion Credit Facility
March 25 2011 - 4:59PM
- $750 million Revolving Credit Facility
- $250 million Term Loan
LKQ Corporation (Nasdaq:LKQX) today announced that it entered into
a definitive credit agreement with several lenders to borrow up to
$1.0 Billion. The new facility replaces the Company's $750 million
facility that would have expired in October 2013.
"The new revolving credit facility and term loan
give LKQ additional flexibility to execute our growth plans at
attractive rates," commented Joseph Holsten, Vice Chairman and
Co-Chief Executive Officer of LKQ Corporation.
The key features of the secured credit facility
include:
- $750 million revolving credit facility with a $300 million
multicurrency sublimit
- $250 million term loan facility
- Initial pricing on the United States dollar portions of the
facility at Libor plus 175 basis points (a 50 basis point reduction
relative to the Company's prior facility) with an undrawn fee of 35
basis points
- Annual amortization payments on the term loan of 5% in years 1
and 2, 10% in years 3 and 4, and 15% in year 5 with a balloon
payment at maturity
- $400 million accordion feature
- 5 year term expiring March 25, 2016
John Quinn, Executive Vice President and Chief
Financial Officer commented: "In addition to the increased
borrowing capacity, we expect the new facility to bring a number of
benefits including lower borrowing costs, reduced amortization
payouts, more efficient cash management and extending our only
major debt maturity to 2016."
The Company indicated the initial use of proceeds
will be repayment of the prior credit facility and for general
corporate purposes.
The Company confirmed that previously issued
guidance released on February 24, 2011 did not include the impact
of the refinancing. The Company anticipates a first quarter 2011
write-off of debt issuance costs of approximately $6 million
related to the retired credit facility.
JP Morgan Chase Bank, N.A. acted as Administrative
Agent, Bank of America, N.A as Syndication Agent, and RBS Citizens,
N.A. and Wells Fargo Bank, N.A. as Co-Documentation Agents.
J.P. Morgan Securities, LLC, Merrill Lynch, Pierce,
Fenner & Smith Inc., RBS Citizens, N.A. and Wells Fargo
Securities, LLC acted as Joint Bookrunners and Joint Lead
Arrangers.
About LKQ Corporation
LKQ Corporation is the largest nationwide provider of
aftermarket and recycled collision replacement parts, and
refurbished collision replacement products such as wheels, bumper
covers and lights, and a leading provider of mechanical replacement
parts used to repair light vehicles. LKQ operates more than 325
facilities, offering its customers a broad range of replacement
systems, components, and parts to repair automobiles and light,
medium and heavy-duty trucks.
Forward Looking Statements
The statements in this press release that are not historical in
nature are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These include
statements regarding our expectations, beliefs, hopes, intentions
or strategies. Forward-looking statements involve risks and
uncertainties, some of which are not currently known to
us. Actual events or results may differ materially from those
expressed or implied in the forward looking statements as a result
of various factors.
These factors include:
- uncertainty as to changes in U.S. general economic activity and
the impact of these changes on the demand for our products and our
ability to obtain financing for operations;
- fluctuations in the pricing of new original equipment
manufacturer ("OEM") replacement parts;
- the availability and cost of our inventory;
- variations in vehicle accident rates or miles driven;
- changes in state or federal laws or regulations affecting our
business;
- changes in the types of replacement parts that insurance
carriers will accept in the repair process;
- changes in the demand for our products and the supply of our
inventory due to severity of weather and seasonality of weather
patterns;
- increasing competition in the automotive parts industry;
- uncertainty as to the impact on our industry of any terrorist
attacks or responses to terrorist attacks;
- our ability to operate within the limitations imposed by
financing arrangements;
- our ability to obtain financing on acceptable terms to finance
our growth;
- declines in the values of our assets;
- fluctuations in fuel and other commodity prices;
- fluctuations in the prices of scrap metal and other metals;
- our ability to develop and implement the operational and
financial systems needed to manage our operations;
- our ability to integrate and successfully operate acquired
companies and any companies acquired in the future and the risks
associated with these companies;
- claims by OEMs or others that attempt to restrict or eliminate
the sale of aftermarket products;
- termination of business relationships with insurance companies
that promote the use of our products;
- product liability claims by the end users of our products or
claims by other parties who we have promised to indemnify for
product liability matters;
- currency fluctuations in the U.S. dollar versus the Canadian
dollar, the Mexican peso and the Taiwan dollar;
- instability in regions in which we operate, such as Mexico,
that can affect our supply of certain products; and
- other risks that are described in our Form 10-K filed February
25, 2011 and in other reports filed by us from time to time with
the Securities and Exchange Commission.
You should not place undue reliance on these forward-looking
statements. All of these forward-looking statements are based
on our expectations as of the date of this press release. We
undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
CONTACT: Joseph P. Boutross
Director, Investor Relations
(312) 621-2793
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