Insituform Technologies, Inc. Enters into New $500 Million Credit Facility
September 01 2011 - 10:11AM
Business Wire
Insituform Technologies, Inc. (Nasdaq Global Select Market:
INSU) (“Insituform” or the “Company”) today announced that it has
entered into a new $500 million credit facility with a syndicate of
banks, with Bank of America, N.A. serving as the administrative
agent and JPMorgan Chase Bank, N.A. serving as the syndication
agent. The credit facility consists of a $250 million five-year
revolving credit line and a $250 million five-year term loan
facility. The entire amount of the term loan was drawn by the
Company on August 31, 2011 for the following purposes: (1) to pay
the $115.8 million cash purchase price of the Company’s acquisition
of the North American business of Fyfe Group, LLC, which
transaction closed on August 31, 2011; (2) to retire $52.5 million
in indebtedness outstanding under the Company’s prior credit
facility; (3) to redeem the Company’s $65.0 million, 6.54% Senior
Notes, due April 2013, and pay the associated $5.6 million
make-whole payment due in connection with the redemption of the
Senior Notes; and (4) to fund expenses associated with the new
credit facility and the Fyfe North America transaction. This new
facility replaces the Company’s existing $115 million facility.
Merrill Lynch Pierce Fenner & Smith Incorporated and
JPMorgan Securities LLC acted as joint lead arrangers and joint
book managers in the syndication of the credit facility. In
addition to Bank of America and JPMorgan Chase Bank, the
participating banks in the syndicate are Fifth Third Bank, Regions
Bank, US Bank, PNC Bank, BBVA Compass, KeyBank, Bank of the West,
Associated Bank, HSBC Bank USA, Branch Banking and Trust Company,
Comerica Bank, National Bank of Kuwait and Stifel Bank and
Trust.
Generally, interest will be charged on the principal amounts
outstanding under the credit facility at the British Bankers
Association LIBOR rate plus an applicable rate ranging from 1.50%
to 2.50% depending on the Company’s consolidated leverage ratio.
The Company also can opt for an interest rate equal to a base rate
(as defined in the credit documents) plus an applicable rate, which
also is based on the Company’s consolidated leverage ratio. The
applicable LIBOR borrowing rate (LIBOR plus Company’s applicable
rate) as of August 31, 2011 was approximately 2.58%.
The credit facility includes a provision permitting the Company,
by notice to Bank of America, N.A., as administrative agent, to
increase either the revolving credit line or the term loan with
additional commitments of up to $125 million from either the
existing lending banks or additional financial institutions.
David Martin, Senior Vice President and Chief Financial Officer,
said, “We are pleased by the enthusiasm shown by the participating
banks in bringing this credit facility to fruition and are
gratified by the confidence that our banks have shown in our
company, our acquisition strategy and our operating plan going
forward. This new credit facility also is an important step in our
efforts to optimize the Company’s balance sheet and achieve an
appropriate level of return for our stockholders.”
Insituform Technologies, Inc. is a global leader in
infrastructure protection. Insituform provides proprietary
technologies and services for the corrosion protection of
industrial pipelines and for rehabilitating and strengthening
sewer, water, energy and mining piping systems, buildings, bridges
and tunnels and waterfront structures. More information about the
Company can be found on its internet site at
www.insituform.com.
Insituform® and the Insituform® logo are the registered
trademarks of Insituform Technologies, Inc. and its affiliates.
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