Summary
On December 13, 2012, Fastenal Company (FAST) announced the execution of a new $125 million unsecured revolving credit facility with Wells Fargo Bank, National Association. This facility, which matures on December 13, 2015, provides the company with significant financial flexibility, including a $40 million letter of credit subfacility and a $10 million swing line loan subfacility. The agreement is guaranteed by Fastenal's material domestic subsidiaries, offering lenders additional security. The new credit facility introduces specific interest rate options, primarily based on LIBOR plus a spread of 0.875%, and includes commitment fees based on the average quarterly utilization of the facility. Crucially, the agreement imposes financial covenants, requiring Fastenal to maintain a consolidated total leverage ratio of no more than 1.00 to 1.00 and a minimum EBITDA of $125 million. These covenants, along with customary affirmative and negative covenants and events of default, are designed to ensure the company's financial health and repayment ability.
Key Highlights
- 1Fastenal Company secured a new $125 million unsecured revolving credit facility, providing increased financial flexibility.
- 2The credit facility has a maturity date of December 13, 2015.
- 3The facility includes a $40 million letter of credit subfacility and a $10 million swing line loan subfacility.
- 4Interest rates are primarily tied to LIBOR plus a spread of 0.875%.
- 5Commitment fees range from 0.10% to 0.125% based on facility utilization.
- 6Key financial covenants include a maximum consolidated total leverage ratio of 1.00x and a minimum annual EBITDA of $125 million.
- 7The agreement is guaranteed by Fastenal's material domestic subsidiaries.