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Federal-Mogul Refinances Existing Credit Facility With Citicorp, Others

April 18, 2014, 07:22 AM
Filed Under: Automotive

Federal-Mogul Holdings Corporation, a leading global supplier of automotive components, technologies and services, announced it has successfully secured $2.6 billion to refinance existing debt.

Federal-Mogul Holdings Corporation entered into an amendment to Federal-Mogul Corporation's existing term loan and revolving credit agreement that, among other things, provides for a new term loan facility of $700 million due April 2018 and a new term loan facility of $1.9 billion due April 2021.  The proceeds of the new term loans will be used to repay term loans outstanding under the existing credit agreement. In addition, under the amendment to the existing credit agreement, Federal-Mogul Holdings Corporation will assume all of the rights and obligations of Federal-Mogul Corporation under its existing $550 million revolving credit facility.

 "We are pleased with this transaction as it positions the company favorably for the future by extending loan maturity dates at competitive interest rates and strengthens the liquidity and financial profile of the company," said Rajesh Shah, senior vice president and chief financial officer for Federal-Mogul Holdings Corporation.   

The company earlier announced that Federal-Mogul Corporation became a direct, wholly-owned operating subsidiary of a new public holding company, Federal-Mogul Holdings Corporation.

The following is an excerpt from Federal Mogul's 8-K filing dated Apr. 16:

On April 15, 2014, the Holding Company, as the new borrower, entered into an amendment (the “Amendment”) of the Term Loan and Revolving Credit Agreement, dated as of December 27, 2007 (as amended, the “Credit Agreement”), among FMC, the lenders party thereto, Citicorp USA, Inc., as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, and Wachovia Capital Finance Corporation and Wells Fargo Foothill, LLC, as Co-Documentation Agents, with respect to a new Tranche B term loan facility (the “New Tranche B Facility”) and a new Tranche C term loan facility (the “New Tranche C Facility,” and together with the New Tranche B Facility, the “New Facilities”). The Amendment, among other things, (i) provides for aggregate commitments under the New Tranche B Facility of $700 million with a maturity date of April 15, 2018, (ii) provides for aggregate commitments under the New Tranche C Facility of $1.9 billion with a maturity date of April 15, 2021, (iii) increases the interest rates applicable to the New Facilities as described below, (iv) provides that in the event that as of a particular determination date more than $700 million aggregate principal amount of existing term loans and certain related refinancing indebtedness will become due within 91 days of such determination date, the revolving credit facility under the Credit Agreement will mature on such determination date, (v) provides for additional incremental indebtedness, secured on a pari passu basis, of an unlimited amount of additional indebtedness if the Holding Company meets a financial covenant incurrence test; and (vi) amends certain other financial and restrictive covenants to provide the Holding Company with additional operating flexibility. Pursuant to the Amendment, the Holding Company assumed all of the obligations of FMC with respect to the existing revolving credit facility under the Credit Agreement.

Federal-Mogul Holdings Corporation is a leading global supplier of products and services to the world's manufacturers and servicers of vehicles and equipment in the automotive, light, medium and heavy-duty commercial, marine, rail, aerospace, power generation and industrial markets. The company's products and services enable improved fuel economy, reduced emissions and enhanced vehicle safety.

Federal-Mogul operates two independent business divisions, each with a chief executive officer reporting to Federal-Mogul's Board of Directors. Federal-Mogul's Powertrain Division designs and manufactures original equipment powertrain components and systems protection products for automotive, heavy-duty, industrial and transport applications. Federal-Mogul's Vehicle Components Division sells and distributes a broad portfolio of products through more than 20 of the world's most recognized brands in the global vehicle aftermarket, while also serving original equipment vehicle manufacturers with products including braking, chassis, wipers and other vehicle components. 

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