The marine industry’s largest company has extended its credit facilities and borrowing as a precautionary measure to increase liquidity and financial flexibility in the wake of substantial uncertainty stemming from the COVID-19 crisis
US-based Brunswick Corporation filed notice today that it has an amended and restated credit agreement dated from March 21, 2011. The Revolving Credit Facility provides for up to $400.0 million principal amount of revolving loans and letters of credit and expires on September 26, 2024. The Revolving Credit Facility also includes provisions to add up to $100.0 million of additional borrowing capacity and to extend the facility for an additional one-year term, subject to lender approval.
On March 23, 2020, the Company delivered borrowing requests to the administrative agent for the Revolving Credit Facility to increase borrowing under the Revolving Credit Facility to $385 million, which constitutes substantially all of the amount available for borrowing under the Revolving Credit Facility, net of outstanding letters of credit. Revolving loans under the Revolving Credit Facility mature on September 26, 2024, and the Company may repay amounts borrowed at any time without penalty.
Borrowings under the Revolving Credit Facility initially will bear interest at a rate tied to adjusted LIBOR plus a spread of 110 basis points. The rates are determined by the Company’s credit ratings and leverage ratio, with spreads ranging from 100 to 190 basis points for such LIBOR rate borrowings.
Brunswick said it is borrowing the amounts described above under the Revolving Credit Facility as a precautionary action in order to increase its cash position and to enhance its liquidity and financial flexibility during this period of substantial uncertainty in the global markets resulting from COVID-19. Proceeds from the borrowings are expected to be held on the Company’s balance sheet and may be used for general corporate purposes.