Generac Completes Refinancing of Senior Secured Credit Facility; Declares Special Cash Dividend of $5.00 Per Share
June 03 2013 - 8:30AM
Business Wire
Generac Holdings Inc. (NYSE: GNRC, the “Company”), a leading
designer and manufacturer of generators and other engine powered
products, announced today that it has completed the previously
disclosed amendment and restatement of its senior secured term loan
credit facility on May 31, 2013, pursuant to which it has incurred
$1.2 billion of senior secured term loans to replace its prior term
loan facilities. The new term loans will mature in 2020, with
interest initially accruing at LIBOR plus 2.75% with a LIBOR floor
of 0.75%. Beginning in the second quarter of 2014, the spread to
LIBOR of the new term loans can be reduced to LIBOR plus 2.50% to
the extent that the Company's net debt leverage ratio falls below
3.0 times.
Additionally, the Company has obtained a one-year extension of
the maturity date of its existing $150 million senior-secured,
asset-based revolving credit facility. The extended revolving
credit facility will terminate in 2018, and will continue to accrue
interest on drawn proceeds using an availability-based pricing grid
starting at LIBOR plus 2.0%.
As previously announced, the Company intends to use a portion of
the proceeds from the new term loans to fund a special cash
dividend to its stockholders of $5.00 per share, or approximately
$342 million in the aggregate. After paying off the outstanding
principal and accrued interest on the prior term loan facilities,
the remaining funds from the new term loans will be used for
general corporate purposes and to pay related financing fees and
expenses.
Following the closing of the new senior secured term loan
facility and related borrowings thereunder, on May 31, 2013, the
Company’s Board of Directors declared the special cash dividend of
$5.00 per share. The special cash dividend is payable to
stockholders of record on June 12, 2013 and will be paid on June
21, 2013. The Company has been informed by the New York Stock
Exchange that the ex-dividend date is expected to be June 10, 2013,
in accordance with its rules.
As a result of the closing on the $1.2 billion of senior secured
term loans, the Company is updating its guidance for interest
expense for the full-year 2013. Interest expense is now expected to
be in the range of $55.0 to $57.0 million, which includes $50.0 to
$51.0 million of debt service costs, at current LIBOR rates, plus
$5.0 to $6.0 million for deferred financing cost and original issue
discount amortization. Interest expense during the third quarter of
2013, the first full quarter under the new capital structure, is
expected to be approximately $13.0 million, which includes
approximately $2.0 million of deferred financing costs and original
issue discount amortization.
Forward-looking Information
Certain statements contained in this news release, as well as
other information provided from time to time by Generac Holdings
Inc. or its employees, may contain forward looking statements that
involve risks and uncertainties that could cause actual results to
differ materially from those in the forward looking statements.
Forward-looking statements give Generac’s current expectations and
projections relating to the Company’s financial condition, results
of operations, plans, objectives, future performance and business.
You can identify forward-looking statements by the fact that they
do not relate strictly to historical or current facts. These
statements may include words such as “anticipate,” “estimate,”
“expect,” “project,” “plan,” “intend,” “believe,” “confident,”
“may,” “should,” “can have,” “likely,” “future” and other words and
terms of similar meaning in connection with any discussion of the
timing or nature of future operating or financial performance or
other events.
Any such forward looking statements are not guarantees, and
involve risks, uncertainties (some of which are beyond the
Company’s control) and assumptions. Although Generac believes any
forward-looking statements are based on reasonable assumptions, you
should be aware that many factors could cause outcomes to differ
materially from those anticipated in any forward-looking
statements. With respect to the forward-looking statement regarding
future interest expense, examples of such factors could include an
unexpected increase in LIBOR and changes in interest rate swap
arrangements.
Any forward-looking statement made by Generac in this press
release speaks only as of the date on which it is made. Generac
undertakes no obligation to update any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as may be required by law.
SOURCE: Generac Holdings Inc.
Generac Holdings Inc.York A. Ragen, 262-506-6064Chief Financial
OfficerInvestorRelations@generac.comorMichael W. Harris,
262-544-4811 x2675Director - Finance and Investor
RelationsMichael.Harris@generac.com
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