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KeyBank Agents $350MM Credit Facility for Universal Logistics Holdings

November 29, 2018, 07:54 AM
Filed Under: Logistics

Universal Logistics Holdings, Inc., a provider of customized transportation and logistics solutions, announced that it has closed on a new $350.0 million syndicated credit facility. The credit facility consists of a $150.0 million term loan and a $200.0 million revolving loan. Universal expects the new credit facility to provide the requisite liquidity for Universal to continue its acquisition strategy, while streamlining its overall debt structure and reducing borrowing costs. Certain proceeds advanced at closing under the new credit facility were used to repay certain existing indebtedness and to pay fees and expenses associated with the new financing.

"Closing this new credit facility is a significant milestone in Universal's continued transformation," stated Jude Beres, Universal's Chief Financial Officer. "It gives us the flexibility and dry powder to make strategic acquisitions, expand our North American footprint, and clears a path for Universal's continued success. I would like to say thank you to all our syndicate partners, advisors and Universal's finance team for working so hard to get the job done."

Borrowings under the $200.0 million revolving loan may be made until the maturity date, which is November 26, 2023. Proceeds from the $150.0 million term loan were advanced on November 27, 2018 and mature on November 26, 2023. The term loan will be repaid in consecutive quarterly installments, as defined in the credit agreement, commencing March 31, 2019, with the remaining balance due at maturity. At closing, the total outstanding balance under the new credit facility was approximately $186.6 million.

Borrowings under the credit facility generally bear interest at a LIBOR-based rate plus a margin ranging from 1.25 to 2.00%, depending on Universal's then-existing leverage ratio. The applicable interest rate at closing was LIBOR plus 1.75%. The credit agreement also requires Universal to pay a quarterly fee of 0.25%, subject to adjustment based on Universal's leverage ratio, multiplied by the amount of unused credit commitments.

The credit agreement includes customary affirmative and negative covenants, as well as financial covenants requiring Universal to maintain minimum fixed charge coverage and leverage ratios, as defined in the credit agreement.

KeyBank National Association and The Huntington National Bank were joint lead arrangers and joint book runners. KeyBank is also the administrative agent and issuing lender.

Dykema served as Universal's legal advisors on the financing.

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