Generator maker Generac (GNRC +0.74%) announced this morning it had completed the refinancing of its senior secured term loan credit facility and, as it previously promised, will use part of the proceeds to pay investors a special dividend of $5.00 per share, payable on June 21 to stockholders of record on June 12.
Generac said the refinancing resulted in it incurring $1.2 billion of senior secured term loans that replaced 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%. Moreover, beginning in the second quarter of 2014, the spread to LIBOR of the new term loans can be reduced to LIBOR plus 2.50% if its net debt leverage ratio falls below 3.0 times.
Generac also obtained a one-year extension to the maturity date of its existing $150 million senior-secured, asset-based revolving credit facility. The extended revolving credit facility will terminate in 2018, but will continue to accrue interest on drawn proceeds using an "availability-based pricing grid" starting at LIBOR plus 2%.
As previously announced, the generator maker intends to use approximately $342 million of the proceeds from the new term loans to fund a special cash dividend to its stockholders of $5.00 per share. The company does not pay a regular dividend on its common stock. The remaining funds will be used for general corporate purposes and to pay related financing fees and expenses.
