Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) has begun a major refinancing that will provide it with greater financial flexibility to execute its long-term strategic agenda and reduce its interest expense, the company said.
Bank of America Merrill Lynch and SunTrust Robinson Humphrey, Inc. acted as joint lead arrangers and joint bookrunners for the new facility with Bank of America Merrill Lynch as administrative agent and SunTrust Bank as syndication agent; Wells Fargo Bank, National Association, MUFG, through The Bank of Tokyo-Mitsubishi UFJ, Ltd., JPMorgan, US Bank National Association, Citizens Bank, N.A., Regions Bank, and Fifth Third Bank, as co-documentation agents; KeyBank National Association, Morgan Stanley Bank, N.A., Manufacturers Bank and City National Bank as lenders.
The company expects the annualized reduction of interest expense to be approximately USD20 million. There also will be a one-time charge associated with the partial write-off of prior refinancing fees which is excluded from the above interest expense.
On June 17, 2016, the company entered into an amended and restated credit facility that extends the facilities´ maturity date to June 17, 2021 and replaces the existing revolving credit facility, in an aggregate principal amount of up to USD350 million.
The company also announced that on July 18, 2016 it intends to redeem USD460 million principal amount of its 7.125 percent second-priority senior secured notes due 2021.
Once the redemption of the notes is completed, the company´s funded debt will primarily consist of USD100 million of drawings on the new revolving credit facility, a new term loan of USD400 million.
The new credit facility is collateralized by a substantial portion of the company´s assets, including certain real property.
Aerojet Rocketdyne Holdings, Inc. delivers solutions in the aerospace and defense markets. The company is an aerospace and defense provider of propulsion and energetics to the space, missile defense and strategic systems, tactical systems and armaments areas, in support of domestic and international markets.