Blue Bird Corporation (Nasdaq: BLBD) has entered into a Second Amendment to its Credit Agreement, closing a refinancing that increases the company's available borrowing capacity to $600 million. The new facilities replace the company's existing $250 million facilities and extend the maturity date from November 17, 2028, to September 30, 2031.
The new credit agreement is structured with a $300 million revolving credit facility and a $300 million delayed draw term loan facility. Borrowings under the delayed draw term loan are available for up to 24 months after closing or until the full $300 million has been drawn, whichever occurs first. The funds may be used to refinance existing debt and primarily fund capital projects, research and development, and working capital.
At closing, Blue Bird had approximately $86 million of carry-over debt drawn under the new facilities and $670 million of available liquidity. The agreement lowers the interest rate margin to SOFR plus 1.25% to 2.25%, based on leverage, down from the previous range of SOFR plus 1.75% to 3.25%. The agreement also raises the maximum total net leverage ratio to 3.25x and expands the accordion feature to the greater of $250 million or 1.0x trailing twelve-month EBITDA.
Bank of Montreal acted as Administrative Agent, Joint Lead Arranger, and Joint Bookrunner. Bank of America, N.A. served as Syndication Agent, Joint Lead Arranger, and Joint Bookrunner, while CIBC Bank USA, Fifth Third Bank, N.A., Regions Bank, and TD Bank N.A. served as Joint Lead Arrangers and Joint Bookrunners.
In addition to the main refinancing, certain of Blue Bird’s wholly-owned subsidiaries, including Corporation Micro Bird Inc., Technologies Ecotuned Inc., Micro Bird USA LLC, and Micro Bird USA Corporation, closed on a separate Credit Agreement with TD Bank. This agreement provides a line of credit up to $35 million (Canadian dollars) for general corporate purposes, including working capital and capital expenditures.
