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Generac Power Systems Increases ABL With Merrill Lynch, Others

June 01, 2015, 08:01 AM
Filed Under: Energy

On May 29, 2015, Generac Power Systems, Inc. (the “Lead Borrower”), a wholly owned subsidiary of Generac Holdings, entered into Amendment No. 2 (the “ABL Amendment”) to that certain Credit Agreement, dated as of May 30, 2012, as amended by Amendment No. 1, dated as of May 31, 2013 (as the same may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ABL Credit Agreement”), among Generac Acquisition Corp. (“Holdings”), the Lead Borrower, certain domestic subsidiaries of the Lead Borrower (together with the Lead Borrower, collectively, the “Borrowers”), the lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent and the other agents named therein.

The ABL Amendment (i) increases the $150.0 million senior secured revolving credit facility provided under the ABL Credit Agreement to $250.0 million (the “ABL Facility”), (ii) extends the maturity date of the ABL Facility from May 31, 2018 to May 29, 2020 and (iii) increases the uncommitted incremental facility under the ABL Credit Agreement from $50.0 million to $100.0 million. Additionally, the ABL Amendment reduces (i) the interest rate spread applicable to the ABL Facility by 50 basis points and (ii) the unused line fee by 12.5 basis points, in each case, across all tiers. In order to take advantage of this improved pricing, the Lead Borrower borrowed $100.0 million from the ABL Facility on the closing date, which amount was used to make a voluntary prepayment of its senior secured term loan credit facility.

The ABL Amendment also relaxes certain restrictions on the Borrowers’ ability to, among other things, (i) make additional investments and acquisitions (including foreign acquisitions), (ii) make restricted payments and (iii) incur additional secured and unsecured debt (including foreign subsidiary debt).

Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and Wells Fargo Bank, N.A. acted as joint lead arrangers for the ABL Amendment.

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