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Aeroflex Reprices Credit Facility, Eliminates Leverage Covenant

May 30, 2013, 07:33 AM
Filed Under: Facility Amendments

Aeroflex Holding Corp. announced that its wholly-owned subsidiary, Aeroflex Incorporated, obtained an amendment of its senior secured credit agreement.

Among other things, the amendment: increased the outstanding term loan by approximately $6 million to $612 million, eliminated the total leverage ratio covenant from the term loan portion of the facility, reduced the effective interest rate payable with respect to outstanding loans under the facility by 1.25% (comprised of a reduction of .25% from the LIBOR floor and 1.0% from the spread above LIBOR), and increased the term loan tenor by eighteen months to November 2019. The amendment also reduced the availability under Aeroflex’s undrawn revolving credit facility from $75 million to $57.1 million, as well as made certain adjustments to the leverage covenant which is only tested if the revolving credit facility is used. Aeroflex paid certain one-time fees and expenses in connection with the amendment in the aggregate amount of approximately $4 million, including original issue discount.

Commenting on the amendment, John Adamovich, Aeroflex’s chief financial officer stated, “We are delighted in the confidence the market has placed in Aeroflex. The changes in the Agreement provide greater operating flexibility and will result in an annual interest savings of approximately $7.3 million, or $.05 per share after tax.” Adamovich added “We have used our cash flow over the last two years to repay nearly $120 million of the term loan and intend to use the interest savings for continued debt reduction.”

Aeroflex Holding Corp. is a leading global provider of high performance microelectronic components, and test and measurement equipment used by companies in the space, avionics, defense, commercial wireless communications, medical and other markets.

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