Aerojet Rocketdyne refinances debt to gain flexibility

Aerojet Rocketdyne Holdings Inc., parent of the Sacramento-area rocket maker, on Monday announced a refinancing of existing debt, a move the company said will give it greater fiscal flexibility while reducing interest costs.

Under the more favorable terms of the deal, the company projects a $20 million reduction in annual interest expenses. There will be a one-time charge associated with the partial write-off of prior refinancing fees.

The move involved financial institutions including Bank of America Merrill Lynch and SunTrust Robinson Humphrey Inc.

Eileen Drake, Aerojet’s president and CEO, called the action “a fantastic deal for our company … Our decision to refinance was driven by a unique opportunity to take advantage of robust debt market conditions.”

Aerojet said it entered into a new credit facility last Friday, extending the maturity date to June 17, 2021, and replacing the existing revolving credit facility in an aggregate principal amount of up to $350 million. The company also entered into a delayed draw term loan facility, which is available until Sept. 17, in an aggregate principal amount of up to $400 million.

On July 18, the company said, it intends to redeem $460 million principal amount of its 7.125 percent second-priority senior secured notes due in 2021. Note holders will be formally notified of the redemption.

The company said collateral for the new credit facility involves “a substantial portion of the company’s assets, including certain real property.”

This story was originally published June 20, 2016 at 1:22 PM with the headline "Aerojet Rocketdyne refinances debt to gain flexibility."