Summary
On June 15, 2011, II-VI Incorporated (now Coherent Corp.) entered into a new $50.0 million unsecured credit facility with PNC Bank, National Association. This new facility replaces a previous $60.0 million credit line and was guaranteed by its domestic subsidiaries. The company retains the flexibility to increase the facility by an additional $30.0 million. The credit agreement has a five-year term and includes variable interest rates based on the company's leverage. This refinancing demonstrates a strategic move to manage the company's debt obligations. While the total principal amount of the credit facility has decreased slightly, the unsecured nature and the inclusion of expansion options suggest a potentially improved credit profile or a different financing strategy. Investors should note the covenants, particularly those related to interest coverage and leverage ratios, as key indicators of the company's financial health and adherence to its debt agreements.
Key Highlights
- 1II-VI Incorporated (COHR) established a new $50.0 million unsecured credit facility with PNC Bank, National Association, dated June 15, 2011.
- 2The new credit facility replaces a prior $60.0 million credit facility.
- 3The facility is guaranteed by all existing and future domestic subsidiaries of II-VI Incorporated.
- 4The company has the option to increase the credit facility by up to an additional $30.0 million.
- 5The credit facility has a five-year term.
- 6Interest rates are variable, ranging from LIBOR plus 0.625% to LIBOR plus 1.50%, dependent on leverage ratios.
- 7The agreement includes customary covenants, such as limitations on indebtedness, liens, and distributions, as well as financial covenants requiring a minimum interest coverage ratio of 4.0 and a maximum leverage ratio of 3.0.