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Wells Fargo, GE Capital Arrange $225MM Facility for Federal Signal

March 14, 2013, 07:44 AM
Filed Under: Manufacturing

Federal Signal Corporation successfully completed the refinancing of its existing senior secured credit facilities with new senior secured credit facilities, consisting of a five-year, $150 million revolving credit facility and a five-year, $75 million fully funded term loan A facility.

"I am delighted with the result of our debt refinancing efforts and the much improved capital structure of Federal Signal,” said Dennis Martin, Federal Signal’s president and chief executive officer. “We received strong demand in the bank market allowing us to take advantage of very favorable rates. This transaction strengthens our balance sheet and affords us the flexibility needed to achieve our goals in growing the company. We have a very strong bank group that will benefit Federal Signal for years to come.”

Wells Fargo Bank is the administrative agent for the senior secured pro rata agreement and GE Capital, Corporate Finance is the syndication agent. Wells Fargo Securities, LLC and GE Capital Markets, Inc. are joint lead arrangers and joint book managers.

The opening interest rate for both the $75 million fully funded senior secured term loan A and the $150 million senior secured revolving credit facility is LIBOR plus a margin of 2.75%. The company estimates it will save more than $10 million of interest expense per annum. The company also estimates it will record an $8.7 million charge in the first quarter of 2013 related to the termination of its prior debt agreements. The charge includes a non-cash write-off of deferred financing costs of $4.6 million and a cash prepayment premium of $4.1 million. The senior secured pro rata agreement is subject to affirmative, negative and financial covenants and other customary conditions.

Federal Signal Corporation enhances the safety, security and well-being of communities and workplaces around the world. Founded in 1901, Federal Signal is a leading global designer and manufacturer of products and total solutions that serve municipal, governmental, industrial and commercial customers.

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