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PNC Agents L.B. Foster Facility Amendment

July 05, 2016, 07:45 AM
Filed Under: Manufacturing

L.B. Foster Company has amended its revolving credit facility agreement maturing in March 2020 that decreases the size of the facility and increases the maximum leverage ratio until the first quarter of 2018 when it returns to its original terms and conditions.  Key elements to the amendment include:

  • The maximum leverage ratio is increased to 4.75 to 1.00 for the second and third quarters of 2016 and then steps down 25 basis points per quarter until it reverts to 3.25 to 1.00 in the first quarter of 2018 and all fiscal quarters thereafter.
  • The size of the facility was reduced to $275 million from $335 million in order to better align the facility with anticipated needs as well as to reduce borrowing costs.
  • The Company’s obligations under the amendment will be secured by the grant of a security interest by the domestic borrowers and domestic guarantors in substantially all of the personal property owned by such entities.  Additionally, the equity interests in each of the domestic loan parties, other than the Company, and the equity interests held by each domestic loan party in their domestic subsidiaries, shall be pledged to the lenders as collateral for the lending obligations.
  • The maximum amount of dividends, distributions and redemptions is reduced to $4 million annually from $25 million until March 31, 2018 when the limit will revert to $25 million.
  • Acquisitions will be limited to an aggregate purchase price of $12 million through March 31, 2018.

David J. Russo, Senior Vice President and Chief Financial Officer, said: “This revised credit agreement provides substantially improved flexibility for L.B. Foster to navigate through the current challenging environments in our rail and energy markets while we work to reduce leverage and position the Company for growth when conditions improve.  We certainly appreciate the strong support provided by our bank group.”

The company’s five bank group is led by PNC Bank, N.A. as Administrative Agent, with Bank of America N.A. and Wells Fargo Bank N.A. as Co-Syndication Agents, and Citizens Bank of Pennsylvania, and Branch Banking and Trust Company as participants.

L.B. Foster is a leading manufacturer, fabricator, and distributor of products and services for the rail, construction, energy and utility markets with locations in North America and Europe.

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