Aeroflex Announces Amendment and Repricing of Its Credit Agreement
Eliminates Leverage Covenant
Reduces Annual Interest Expense by $7.3 million
PLAINVIEW, N.Y.--(BUSINESS WIRE)-- Aeroflex Holding Corp. (ARX) ("Aeroflex (ARXX)") (NYSE: ARX), a leading global provider of high performance microelectronic components, and test and measurement equipment, today announced that its wholly-owned subsidiary, Aeroflex Incorporated, obtained an amendment of its senior secured credit agreement (the 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 Aeroflexs 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, Aeroflexs 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. Mr. 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.
All statements other than statements of historical fact included in this press release regarding Aeroflexs business strategy and plans and objectives of its management for future operations are forward-looking statements. When used in this press release, words such as anticipate, believe, estimate, expect, intend and similar expressions, as they relate to Aeroflex or its management, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of Aeroflexs management, as well as assumptions made by and information currently available to its management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, adverse developments in the global economy; changes in government spending; dependence on growth in customers businesses; the ability to remain competitive in the markets Aeroflex serves; the inability to continue to develop, manufacture and market innovative, customized products and services that meet customer requirements for performance and reliability; any failure of suppliers to provide raw materials and/or properly functioning component parts; the inability to meet covenants contained in debt agreements; the termination of key contracts, including technology license agreements, or loss of key customers; the inability to protect intellectual property; the failure to comply with regulations such as International Traffic in Arms Regulations and any changes in regulations; the failure to realize anticipated benefits from completed acquisitions, divestitures or restructurings, or the possibility that such acquisitions, divestitures or restructurings could adversely affect Aeroflex; the loss of key employees; exposure to foreign currency exchange rate risks; and terrorist acts or acts of war. Such statements reflect the current views of management with respect to the future and are subject to these and other risks, uncertainties and assumptions. Aeroflex does not undertake any obligation to update such forward-looking statements. Any projections in this release are based on limited information currently available to Aeroflex, which is subject to change. Although any such projections and the factors influencing them will likely change, Aeroflex will not necessarily update the information, since Aeroflex will only provide guidance at certain points during the year.
Aeroflex Holding Corp.
Andrew Kaminsky, 516-752-6401
Source: Aeroflex Holding Corp.Copyright Business Wire 2013